BPR 370: Registration of shares in the name of beneficial holder.

The applicant (a SA resident natural person) needed a property on which to conduct his business and arranged with his attorney that it be acquired on his behalf and registered in the name of one of the employees of the attorney. The attorney and employee acted as a nominee of the applicant with the acquisition and registration of the property. The property was later transferred to a company and the shares were similarly held in name only, by one of the employees of the attorney.

At all times since the acquisition of the property, and at all times when the shares in the company were held, the applicant had control of the property. The applicant funded and maintained the property, paid all rates and taxes on the property and incurred all costs of renovations and extensions. Consequently, the applicant had possession and control of the property since its acquisition.

The proposed transaction involves the registration of the shares in the name of the applicant who is and always was the beneficial owner and holder of the shares in question.

The ruling made by SARS in connection with the proposed transaction is as follows:

• The registration of the shares in the name of the applicant and the contemporaneous deregistration of the co-applicant (a SA resident natural person) will not constitute a disposal for purposes of the Eighth Schedule.
• Paragraph 38 of the Eighth Schedule will not apply to the proposed transaction.
• The registration of the shares in the name of the applicant will not constitute a “donation” by the co-applicant as defined in section 55(1) of the Act, nor a deemed donation as envisaged in section 58(1).
• No Securities Transfer Tax will be payable on the proposed transaction.
• No Transfer Duty will be payable on the registration of the shares in the name of the applicant.

A copy of BPR 370 can be accessed here.

19/11/2021