Negotiations related to the sale of commercial property.

Posted On Monday, 07 July 2003 02:00 Published by
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Of importance in this regard is: nThe tax regime applicable to the sale agreement: Value Added Tax is payable by the seller if the seller is a VAT vendor and the property is traded in the ordinary course of business.
Negotiations related to the sale of commercial property culminate in the drafting of a sale agreement. Of importance in this regard is: nThe tax regime applicable to the sale agreement: Value Added Tax is payable by the seller if the seller is a VAT vendor and the property is traded in the ordinary course of business. It is zero-rated if the property is "sold as a going concern" ie the purchaser shall use the property for the same investment-trading purposes as the property was used before the sale. Transfer duty is applied to the agreement and is payable by the purchaser within six months of the sale conclusion date if the seller is not a VAT vendor or the building is not sold in the ordinary course of business. On rare occasions, the sale of a property is exempt from transfer duty, eg where the property is transferred to a non-profit-making institution. nThe following information which is inserted into a sale agreement and which includes: (i) Details of the parties; (ii) Details of the property to be transferred; (iii) The price and terms of the transfer; (iv) The tax regime to which transfer is subject; (v) Suspensive conditions; (vi) Incidental terms. nMost commercial agree-ments are concluded subject to an intensive due-diligence review during which underlying assets, income and expenditure are investigated: The following documentation is required to com-plete this review process: (i) Title deeds; (ii) Approved plans; (iii) Leases; (iv) Sale agreement; (v) Management contracts, where applicable; (vi) Corporate resolutions; (vii) Management accounts; (viii) VAT registration forms; and (ix) Financial statements of the property-owning company. nInformation supplied by Courtwell Consulting director Jonathan Smith, tel 011-888-5978 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.
Publisher: The Star
Source: The Star

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