van der Merwe Kobus Estate Analysis: Page 1

Transcription

1 Estate Analysis: Page 1 ASSETS: OCCUPATION: Farmer/ Businessman TELEPHONE: ADDRESS: PO Box 0000 Bloemfontein 0000 MARRIED: Married Out Community of Property SPOUSE: van der Merwe Susan CHILDREN: van der Merwe Anja van der Merwe Pieter Fixed Commercial Building - 15 Long Street 25,000, The Farm : Mooifontein 35,000, The Farm : Sterkspruit 15,000, The Farm : Wilgenhof 25,000, Moveable Bonsmara Cattle Stud 7,000, Farm Implements 4,500, Firearms 45, Furniture 500, Personal Vehicles 800, Life Policy Sanlam ,000, Other Loan Account - vd Merwe Family Trust 3,500, ,345, LIABILITIES: Bank Overdraft 6,000, Capital Gains Tax 13,726, Executors Remuneration 5,240, HP's on Vehicles 400, Landbank Bond 12,000, Tax due to SARS 1,250, ,617, NETT ESTATE: 92,727, r

2 Estate Duty: Page 2 Total Assets 131,345, Plus: 3rd Party Policies 15,200, Liabilities Bank Overdraft 6,000, Capital Gains Tax 13,726, Executors Remuneration 5,240, HP's on Vehicles 400, Landbank Bond 12,000, Tax due to SARS 1,250, Section 4q - Awards to spouse van der Merwe Susan : Furniture 500, van der Merwe Susan : Liberty ,500, van der Merwe Susan : Liberty ,200, van der Merwe Susan : Personal Vehicles 800, van der Merwe Susan : The Farm : Mooifontein 35,000, ,545, ,617, ,000, Primary Rebate -3,500, Taxable Amount: 60,427, % Estate Duty: 12,085,506.00

3 Cash Position: Page 3 Cash Available 0.00 Add: Life Policies 15,000, Liabilities Bank Overdraft 6,000, Capital Gains Tax 13,726, Executors Remuneration 5,240, HP's on Vehicles 400, Landbank Bond 12,000, Tax due to SARS 1,250, Estate Duty 15,000, ,617, ,085, Current Cash Position -35,702,972.00

4 Capital Gains Tax: Page 4 Asset: Market Value: Base Value: Capital Gain: Commercial Building - 15 Long Street 25,000, ,000, ,000, The Farm : Wilgenhof 25,000, ,500, ,500, The Farm : Mooifontein 35,000, ,000, ,000, The Farm : Sterkspruit 15,000, ,500, ,500, Sub Total: 84,000, Less Exclusion at death: 300, Gross Capital Gain: 83,700, % Inclusion: 27,872, Capital Gains 41%: 13,726,800.00

5 Bequests as per existing Will: Page 5 van der Merwe - Familie Trust Commercial Building - 15 Long Street 25,000, Loan Account - vd Merwe Family Trust 3,500, Ou Mutual ,700, Ou Mutual ,700, ,900, van der Merwe Anja The Farm : Sterkspruit 15,000, ,000, van der Merwe Pieter Bonsmara Cattle Stud 7,000, Farm Impliments 4,500, Firearms 45, Momentum ,000, Momentum , The Farm : Wilgenhof 25,000, ,045, van der Merwe Susan Furniture 500, Liberty ,500, Liberty ,200, Personal Vehicles 800, The Farm : Mooifontein 35,000, ,000,000.00

6 Notes: Page 6 Dear Kobus, Your family will inherit the assets as reflected on page 5 of the analysis. During our recent meeting, you mentioned that your spouse and daughter had no interest in farming, and that your son Peter would continue with the farming operation after your death. However, your current WILL reads that your spouse and daughter each inherit a farm. This means that Peter will have to hire farms from his mother and sister, which may impact negatively on his cash-flow should the farming operation go through difficult times. The problem can be solved with life assurance. Peter can effect life assurance on your life, which he can utilize to pay out his mother and sister upon your death. The problem can also be solved should you bequeath the farms to the existing family trust. This will however increase both estate duty and capital gains tax, affecting the liquidity of the estate upon death. Cattle and equipment can be placed in a operating company, which in turn can rent the farms from the family trust. Your spouse and children are both existing capital and income beneficiaries of the trust. The bequest of the farms to a trust, will hold the following benefits: 1. Savings of estate duty by pegging future growth. 2. Saving on income tax and capital gains tax. (The Davis commission is currently investigating the conduit principle) 3. Protection against creditors. 4. Protection of assets for future generations. 5. Saving of estate duty on policies owned by a trust. Last Will and Testament: The revision of your WILL and the Trust Deed is essential. We undertake an audit of the existing Trust Deed to make sure it adheres to the Trust Property Control Act including prevailing tax legislation. Income Needs upon retirement: As farmers approach retirement age, with the younger generation having taken over, an exit strategy becomes relevant without affecting the farm or business operation. Taking action and making timeous provision within the ambit of prevailing tax legislation, is something we can assist you with. Prepared by: John van der Merwe (Adv CFP) 1/03/2016 The analysis was done on information supplied to me by the client and we do not accept any responsibility for the correctness thereof. We confirm that this is merely a financial analysis and we cannot be held responsible for any information in this document. Die ontleding is gedoen na aanleiding van inligting deur die kliёnt aan ons verskaf en aanvaar ons geen verantwoordelikheid vir die korrektheid daarvan nie. Ons bekragtig dat dit slegs 'n finaniёle ontleding is en dat ons nie verantwoordelik gehou kan word vir enige inligting vervat in die dokument nie.