Before we give up our rights to tax property in accordance with
Article 5(1) of the DTC with South Africa we require the South
African authorities to certify that disclosure has been made to
them and that payment of any appropriate tax has been made or will
be enforced. This is because Article 5(3) of the DTC withdraws this
restriction and allows us to tax the property if South Africa is
unable to enforce its right to tax. Conversely, we also need to
certify to the above if the South African authorities must give up
their right to tax property.
Cases in which paragraph (1) operates to exclude some UK
property from the charge to IHT and which are, or but for that
exclusion would be, taxpaying should not be closed until the South
African authorities have certified on Form 745 that disclosure has
been made to them and that payment of any appropriate tax has been
made or will be enforced.
This requirement should be explained to the taxpayer and 2
prints of Form 745 issued to them. Attention should be directed to
the appropriate paragraphs of the form, which the taxpayer is
required to complete. In particular where by reason of the
Convention the UK is giving up its taxing rights, only paragraph 1
is in point, and paragraphs 2 to 7 are not appropriate. On receipt
of a correct and duly certified form the case may be closed: any
error or difficulty should be referred to TG.
Where South Africa gives up the right to tax property under
Article 5(1), South African form Revenue 260 will be forwarded to
this Office in duplicate for certification.
After checking (it is important that the forms themselves
should not be marked in any way) they and the file should be sent
with a note of any error or omission to TG for the issue of the
appropriate certificate.
