One of my clients has sold a property where the seller currently has a payment arrangement in place with SARS which they have strictly adhered to. They have now sold their property and calculated what their net proceeds will be in order to purchase anothe
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
We accept that the seller is your client and that the ‘payment arrangement in place with SARS’ refers to an agreement entered into by a senior SARS official and the taxpayer (your client) under which the taxpayer is allowed to pay a tax debt in in instalments – in other words, the agreement was done under section 167 of the Tax Administration Act.
Section 179, the section that allows SARS to notify a person to pay the money held or owed to SARS in satisfaction of the taxpayer’s outstanding tax debt, doesn’t refer to section 167, as does for instance section 162, 166, 191 or 256.
In terms of section 169(1) an “amount of tax due or payable in terms of a tax Act is a tax debt due to SARS”.
The parties will therefore have to argue that, due to the instalment payment agreement, the amounts are not payable (or due) and that the third party can’t be requested to pay the money to SARS.
We suggest that the taxpayer should alert the third party to the existence of the instalment payment agreement. This would be necessary if the third party receives a section 179 notice before the taxpayer gets a section 179(5)(b) notice.