Drinking and driving – These are your rights

Each year during the festive season, South Africans are confronted with more stringent road blocks and possible arrests for driving under the influence of alcohol. The current legal limit for Blood Alcohol Content is:

  • LESS THAN 0,05g/100ml of blood sampled if you are an ordinary driving licence holder; or
  • LESS THAN 0,02g/100ml of blood sampled if you are the holder of a Professional Driving Permit (PrDP), for example a taxi driver or a bus driver.

Whilst the legal limit in respect of Breath Alcohol Content is:

  • LESS THAN 0,24mg/1000ml of breath sampled if you are an ordinary driving licence holder; or
  • LESS THAN 0,10mg/1000ml of breath sampled if you are the holder of a Professional Driving Permit (PrDP), for example a taxi driver or a bus driver.

Although it is always better to refrain from drinking alcohol if you have to drive, it is important to know what your rights are when pulled over by a police officer for driving under the influence:

  1. You may request that the officer provide identification irrespective of whether or not they are in uniform. If the officer is unable to provide an appointment certificate on demand he or she is in violation of the Criminal Procedure Act and any actions taken by him or her will be unlawful;
  2. If the officer requests you to take a breath or blood alcohol test, you may not If you refuse, you are in contravention of the National Road Traffic Act and necessary force may be inflicted upon you by the officer to take the required samples;
  3. Samples for your blood alcohol content or breath alcohol content must be taken within 2 hours of the alleged transgression (being pulled over by the officer);
  4. You may only be legally arrested after it has been established by the officer that your blood or breath alcohol level exceeds the legal limit. In other words, you may not be arrested merely because your breath smells of alcohol;
  5. You have the right to remain silent and not to make self-incriminating statements. In other words, you do not have to disclose to the officer how many drinks you had;
  6. You have the right to know who the registered medical practitioner is that takes your samples. You may also request for access to your own medical practitioner if he or she is available, the costs of which will be for your personal account;
  7. If you have been arrested, you may use a telephone to contact a relative or an attorney;
  8. If you are on chronic medication, you have the right to take your medication whilst in police custody if a doctor so prescribes;
  9. You have the right to apply for bail once you have been charged and an Investigating Officer has been assigned to your case. If bail is refused for whatever reason, you have to appear in court within 48 hours of your arrest, or during the first court day after the expiry of the 48 hours if the period expires outside ordinary court hours or on a day which is not an ordinary court day. The latter applies when you have for example been arrested on a Friday night and you will then only appear in court during the upcoming Monday;
  10. You have the right to being treated fairly and with respect by all the officers involved and the station where you are being held must provide you with food and water;

It is always better to give your co-operation and to be friendly with the officers.

Remember that it is a criminal offence to bribe police officers. If you are requested to pay a bribe by an officer, immediately report the offence to the relevant authorities.

We wish you a safe and memorable festive season!

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.  Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Unopposed and opposed divorce: What’s the difference?

My spouse said that he/she won’t ‘give me a divorce’. What can I do? Your spouse can oppose the divorce, but it is the Court that grants a divorce, not your spouse. If the Court is convinced that the marital relationship has irretrievably broken down, the Court can grant a decree of divorce even if your spouse does not want to get divorced.

There is a process, called a ‘rule 43’ application, whereby you can ask the Court to grant an order regarding the interim contact to the minor children and maintenance pending the finalisation of the divorce. You can also seek an order for a contribution towards your legal costs, pending the finalisation of the divorce.

What costs are involved?

In the case of an unopposed divorce (i.e. there is no dispute between yourself and your spouse about the divorce or what should happen), your fees will include the drafting of a summons, a settlement agreement, attending Court, consultations and counsel fees. Other expenses incurred may include Sheriff’s fees, traveling costs and admin such as photocopies. Where a divorce is opposed, the costs become unpredictable and entirely dependent on the specifics of the case, the disputes, and the amount of time dedicated to the matter.

How long does it take?

Where a divorce is unopposed and there are no complications or children involved, it can sometimes be finalised in as little as two to three months.

Where a divorce is opposed, it can easily take two to three years, or more. In most cases, however, divorces get settled before the parties have to go to Court – even where the divorce started out as an opposed divorce. As soon as the parties in an opposed divorce reach a settlement agreement and the divorce becomes unopposed, it can again be possible to finalise the divorce in as little as two months.

What you need to do

Before you approach the Court to start divorce proceedings, you should get certified copies of as many of the following documents as you can:

  • Your identity document
  • Your Ante-Nuptial Agreement, if any
  • The children’s births certificates, if any, and
  • Your marriage certificate (the original)

Also make sure you have the following information handy:

  • Your full name(s), surname, identity number, occupation and place of residence
  • Your spouse’s full name(s), surname, identity number, occupation and place of residence
  • Date when you got married and where the marriage took place
  • Children’s full names, surnames, identity numbers
  • Comprehensive details of any funds (such as pension funds, retirement annuities and provident funds) which you or your spouse belongs to, and
  • A list of your assets and liabilities.

You may institute divorce proceedings in either a High Court or Magistrates’ Court (Regional Court), but where the parties are representing themselves in a simple divorce, they should approach the Regional Court.

Reference:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What does the Deeds Office do?

The Deeds Office is responsible for the registration, management and maintenance of the property registry of South Africa. If you are planning on buying a house, it can be useful knowing about the Deeds Office. However, you would use the services of a conveyancer when buying or selling a house. It is recommended that the services of a competent conveyancing firm is utilised in order to minimise the pitfalls that can be associated with property transactions.

What is conveyancing?

Conveyancing is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Steps taken by the conveyancer:

  1. The conveyancer lodges your title deed and other documents in the Deeds Office for registration. These documents will be individually captured on the system. If there is a bond, the conveyancer dealing with the bond will lodge the bond documents with the Deeds Office at the same time as the transfer documents. The transfer, bond and cancellation documents must be lodged in the Deeds Office at the same time to ensure simultaneous registration. If different conveyancers are dealing with registering the purchaser’s bond and cancelling the seller’s bond, then they will need to collaborate.
  1. The Deeds Office examiners go through the documentation that has been submitted, and make sure that it complies with the relevant laws and legislations.
  1. The examiners then inform the conveyancer that the deeds are ready to be registered.
  1. Registration takes place with the conveyancer and Registrar of Deeds present. The transfer of the property is then registered in the purchaser’s name. If there is a bond, it is registered at the same time.
  1. Upon registration, the purchaser becomes the lawful owner of the property. The title deed that reflects this ownership is given to the conveyancer by the deeds office after the registration. Unless a bond has been registered as well, in which case the title deed is given to the bond holder.

The time taken to register a property at the Deeds Office depends on various factors and a number of parties. On average, registering a property transfer takes six to eight weeks, although unforeseen difficulties can cause the period to be extended.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Renting or selling property to foreigners

Renting property in South Africa is a straightforward process. The country has a vast selection of rental accommodation including bachelor flats in apartment blocks, Victorian cottages, stand-alone houses with big gardens, and semi-detached units in modern townhouse complexes.

In South Africa, the right of a foreigner to purchase immovable property was restricted in the past by the Aliens Control Act. These restrictions were uplifted in 2003 by the new Immigration Act (“the Act”) which repealed the Aliens Control Act and many of its restrictive provisions and now clearly defines who a legal foreigner is and who is not. In short, a legal foreigner is a person in possession of a valid temporary residence permit or a permanent residence permit approved by the Department of Home Affairs.

The new Act makes provision for various temporary residence permits to be issued to foreigners, including amongst others:

  • A visitor’s permit
  • A work and entrepreneurial permit
  • A retired person permit

In principle, a landlord or tenant can legitimately lease or sell immovable property to any person recognised under the Act as a legal foreigner.

That said, foreigners working in South Africa with a legal work permit, are not regarded as “non-residents” by the South African Reserve Bank. They are considered to be residents for the duration of the period of their work permit and are therefore not restricted to a loan of only 50% of the purchase price.

It is also important to take note that the Act criminalizes the letting or selling of immovable property to an illegal foreigner by making this transaction equivalent to the aiding and abetting of an illegal foreigner and is such an act classified as a criminal offence in terms of the Act.

In conclusion, a legal foreigner may let or buy immovable property in South Africa, provided that he is the holder of either a legal temporary residence permit or a permanent residence permit approved by the Department of Home Affairs. Ensure that you enquire from your potential tenant or purchaser whether they are legally present in South Africa and obtain the necessary proof from them before entering into any transaction with a foreigner. Also, take account of the restrictions on local financing, particularly where the procurement of financing is a condition precedent to the agreement.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

TRUSTS AND INDEPENDENT TRUSTEES: WHY AN INDEPENDENT TRUSTEE?

In the Supreme Court of Appeal case, Land and Agricultural Bank of South Africa v Parker, the dilemma of insufficient separation between the control and enjoyment of trust assets came to the forefront.

To address this issue, Cameron JA mentioned, obiter dictum, that the problem at hand may possibly be addressed as follows:

…by insisting on the appointment of an independent outsider as trustee to every trust in which (a) the trustees are all beneficiaries and (b) the beneficiaries are all related to one another. 

The Master of the High Court has now taken positive steps to implement the above obiter dictum by issuing a directive in March 2017, which requires that all new trusts registered with the Master, which are so-called family business trusts, must have an independent trustee.

The independent trustee must sign a sworn affidavit in which he/she confirms that he/she has: no family relation or connection, by blood or other, to any of the existing or proposed Trustees, beneficiaries or founder of the trust.

We therefore strongly advise that you choose your independent trustee carefully as he/she will form part of all future decisions made by the trustees.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

DEATH AND TAXES

“…in this world nothing can be said to be certain, except death and taxes

Benjamin Franklin, in 1789

Have you considered seeing a professional regarding your Estate Planning?

Estate Duty is levied at 20% on all property in your estate over the cumulative value of R 3 500 000.00. Unfortunately an estate is not only subject to Estate Duty, but also Capital Gains Tax on certain assets. This could have a negative effect on the liquidity of your estate.

Proper Estate Planning, done timeously, can limit the exposure of your estate to the legal minimum.

At Delport van den Berg Estate & Trust Services, we offer holistic Estate Planning solutions to ensure that your Assets are transferred to your loved ones in a stable and tax effective manner, thereby guarding your Legacy.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

WILL, IT HOLD UP?

Is your current Will valid? Do you have your originally signed Will? Is it kept in a safe place? Do you know who your executor is? Are the provisions in your Will feasible?

All these questions are of utmost importance to ensure that your wishes are adhered to and your loved ones are able to avoid undue frustration during their time of mourning.

The Testator or Testatrix typically have good intentions when drafting certain provisos, but these often lead to unforeseen consequences.

The basic requirements for ensuring that you have a valid Will are set out in the Wills Act 7 of 1953.

Be sure to take note of the following formalities:

  1. The Testator or Testatrix must sign at the end of the Will;
  2. The Will must be signed in the presence of at least two competent witnesses, who are present at the same time and the witnesses must:
    1. Be competent persons (older than 14);
    2. Sign the Will in the presence of the Testator or Testatrix and each other;
    3. Acknowledge the signature of the Testator or Testatrix, not the content;
  3. If the Will has more than 1 page:
    1. The Testator or Testatrix needs to sign each page;
    2. The Testator or Testatrix needs to sign the last page at the end;
    3. The witnesses need to sign only the last page.
  4. If the Will is signed by the Testator or Testatrix, by the making of a mark or by some other person in the presence and by the direction of the Testator or Testatrix – additional formalities will apply.

The person who writes or witnesses a Will is disqualified from receiving any benefits from the Will. The executor, appointed trustee or guardian will also be disqualified to act should he/she or his/her spouse sign as witness.

We are able to assist and ensure that your Will gives effect to your wishes.

To draft a Will, update your Will or receive sound advice, contact the experts:

Call us: 012 361 5001 or Email us: info@delberg.co.za

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

TAXATION LAWS AMENDMENT BILL 2017

Interest free loans or low interest loans to trusts and related companies – sec 7C revisited.

In our circular dated the 10th of January 2017 we discussed the newly introduced Section 7C of the Income Tax Act, which has since been promulgated into law. We made the following statement:

It seems from the wording that an interest free loans or low interest loans to a company, even if the trust owns all the shares, will not fall foul of these provisions. As legislation stands at the moment, this seems to create an opportunity to circumvent the provisions of Section 7C.

Unfortunately and, in our opinion, due to a variety of avoidance schemes utilised by certain practitioners in order to circumvent Section 7C, it was announced in the 2017 Budget Speech that Section 7C will be amended to include interest free loans or low interest loans to companies owned by a trust.

The Draft Taxation Laws Amendment Bill, 2017, which is still open for comments, contains the following amendments to Section 7C:

Section 7C (a) has been redrafted to include a loan, advance or credit made by:

  • a natural person; or
  • at the instance of that person, a company in relation to which that person is a connected person in terms of paragraph (d)(iv) of the definition of connected person,
    • trust in relation to which-
      • (aa) that person or company, or
      • (bb) any person that is a connected person in relation to the person or company referred to in item (aa),
    • to a company that is a connected person to the trust referred to in subparagraph (i) of this section.

With reference to the explanation contained in the Explanatory Memorandum to the Bill, it is clear that there must have been an oversight in the wording of the new paragraph 7C(1)(b)(ii). As the paragraph stands at the moment, and due to the very wide definition of “connected person” in the Income Tax Act, even a loan to a company that has nothing to do with a trust can fall under Section 7C due to the fact that, for instance, the sole director of the company is also a beneficiary of a trust. Clearly this could not have been the intention of the legislator and we are confident that subparagraph (ii) will be amended to refer to a loan to a company that is a connected person as envisaged in paragraph (d)(iv) of the definition of connected person, to the trust referred to in subparagraph (1)(b)(i).

That would mean that only a company where the trust individually, or jointly with any connected person in relation to the trust, holds directly or indirectly at least 20% of the company’s equity share capital or voting rights, will fall foul of these provisions.

To counter certain further avoidance schemes a new subsection (1A) was introduced stating that:

  • If a natural person acquires a claim to an amount owing by a trust or a company in respect of a loan, advance or credit referred to in subsection (1), that person must for purposes of this section be treated as having provided a loan, advance or credit to that trust or company –
  • On the date on which the person acquired that claim; or
  • If that person was not a connected person on that date in relation to-
    • that trust; or
    • the person who provided that loan, advance or credit to that trust or company, on the date on which that person became a connected person in relation to that trust or person, that is equal to the amount of the claim so acquired.

This was brought into the act to counter certain avoidance schemes where a person, who made a loan to a trust, entered into an arrangement in terms of which the claim for the loan against the trust is transferred to another natural person (i.e. a beneficiary of the trust) in order to try and ensure that the link between the natural person who advanced the loan and the loan itself is severed.

Certain other subsections were amended to provide for the inclusion of loans to a company as mentioned above.

A new sub section 5(h) was added providing exemption from the provisions of Section 7C to a trust that was created solely for purposes of giving effect to an employee share incentive scheme under certain circumstances and provided that a person who is a connected person in terms of paragraph (d)(iv) of the definition of connected person in relation to any scheme company would not be entitled to participate in that scheme.

These amendments will come into effect on the 19th July 2017 and will apply in respect of any amount owed by a trust or a company as envisaged in respect of a loan, advance or credit provided to that trust or that company before, on or after that date.

The provisions of sub section 5(h) (employment share incentive trust) is deemed to have come into operation on 1 March 2017 and applies in respect of any amount owed by a trust in respect of a loan, advance or credit provided to that trust before, on or after that date.

A new Section 7D has been introduced, providing that:

Where it must be determined what amount would have been incurred as interest in respect of any loan, debt, advance or amount of credit provided to a person or an amount owed by a person had that interest been incurred at the official rate of interest, that amount must be determined without regard to any rule of the common law or provision of any act in terms of which –

  • the amount of interest, fee or similar finance charge that accrues or is incurred in respect of a debt may not in aggregate exceed the amount of that debt; or
  • no interest may accrue or be incurred in respect of a debt once the amount that has accrued or been incurred as interest is equal to the amount of that debt.

These measures are aimed at invalidating the effect of the in duplum rule in common law which basically states that the amount of interest recoverable from a debtor could never exceed the capital amount of the debt.

This section comes into operation on 1 January 2018 and applies in respect of years of assessment ending on or after that date.

SUMMARY

  • While the result of the amendments are unfortunate, it had to be expected. We again wish to stress the importance of clients contacting their advisors regarding any trusts or affected companies where loans, as envisaged above exist

Even if amended as suggested above, the provisions are still very wide.

For example:

A and four of his cousins (whether on both sides of the family or not) form a company for a business venture and fund the company with interest free loans.

As long as they are the shareholders, Section 7C will not apply. Should one of them decide to transfer his shares to a trust of which he is a beneficiary (or of which a connected person in relation to him is a beneficiary), Section 7C will apply to all loans to the company. Cousins are connected persons, and for that reason all the shareholders are connected persons in relation to the trust. They are shareholders of the company and as such, connected persons in relation to the company.

I do not think that this could have been the intention but, at the moment, it is the result.

  • This is a further chapter in the trust saga and will have an effect on the use of trusts. However, with careful planning by knowledgeable advisors it would still be possible to utilise the trust as a useful estate planning vehicle
  • Please note that this is still draft legislation open for comments. Further changes might and most probably will occur to the final bill being accepted by parliament.
  • We will inform you on any further development

GPJ van den Berg
Delport van den Berg
Estate and Trust Services (Pty) Ltd
gert@delberg.co.za
T: +27 (12) 361 5001

Can I get refunded if I’m sold a defective car?

Ford South Africa has been forced to recall more than 4500 Kuga Ecoboost 1.6 litre models manufactured between December 2012 and February 2014. Ford South Africa’s chief executive Jeff Nemeth announced the recall after more than 50 cases of engine fires had been reported.

This incident has raised the question of whether or not a buyer of a car can get a full refund if it turns out the car has a serious defect. This falls into the domain of the Consumer Protection Act, No 68 of 2008. The CPA serves to protect the interests of all consumers, ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the marketplace and also to give effect to internationally recognised consumer rights.

According to Section 7 of the CPA, a consumer has the:

  • Right to demand quality service,
  • Right to safe, good quality goods,
  • Right to implied warranty of quality.

Will I be able to get my money back?

In terms of section 56 of the act, any product should be fit for purpose for at least six months after purchase. The Ford Kuga hazard is caused by a manufacturing defect, which implies that the owner could return the vehicle within six months of purchase and ask for his/her money back (or a replacement vehicle). The other option is to ask for or accept an offer from Ford to repair the car.

For many reasons, dealers are not just going to just give consumers their money back. The vehicle should first be taken in for the repair and if that fails – or a secondary feature fails and another hazard develops – then the supplier must replace or refund the owner of the vehicle the price that was paid.

Reference:

  • The Consumer Protection Act, No 68 of 2008

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Planning your estate as newlyweds

For newlyweds, one of the most important tasks to attend to is estate planning. The estate planning will depend on what the couple wants and what form of marriage they are in. It is therefore important to keep the following in mind when planning the years ahead together.

Marriage in community of property

There is a joint estate, with each spouse having a 50 percent share in each and every asset in the estate (no matter in whose name it is registered);

  1. In the event of the death of one spouse, the surviving spouse will have a claim for 50 percent of the value of the combined estate. The estate is divided after all the debts have been settled in a deceased estate.
  1. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.
  1. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage. Each spouse’s estate is completely separated, even in the event of death. If you want your spouse to inherit something, you would need to outline this in your Will.

Marriage out of community of property with the accrual system

This is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)