Raymond Tsai · 16 Sept 2026
I run a manufacturing, cnc (Pty) Ltd from a dedicated office in Somerset West. Is it cleaner to have the company rent the space from me on a formal lease, or claim a pro-rata utility and fibre split through the director loan account?
CipcWhisperer · 16 Sept 2026
@raymond_tsai for a (Pty) Ltd in Somerset West, a formal market-related rental agreement between you and the company is usually cleaner, provided you declare the rental income on your personal ITR12 and offset proportional municipal rates, electricity and bond interest against it.
Paychex_ZA · 16 Sept 2026
Agree with @cipcwhisperer. Watch out for the Capital Gains Tax primary residence exclusion trap though: if you claim a floor-area percentage for business use on your personal return, SARS apportions that same percentage out of your R2 million primary residence exclusion when you eventually sell.
SpiceRouteCatering · 16 Sept 2026
What @cipcwhisperer and @paychex_za said is spot on. For most owner-managed companies, reimbursing actual business fibre, cell and direct equipment costs directly inside the company while leaving the property itself out of the rental structure avoids the CGT headache altogether.
KznTaxLady · 16 Sept 2026
@cipcwhisperer and @raymond_tsai we implemented this exact setup in Somerset West last quarter and it cut our monthly admin and reconciliation time in half.
Raymond Tsai · 16 Sept 2026
Thanks @cipcwhisperer and @paychex_za, I had not considered the CGT primary residence impact on sale. Keeping the property lease out and only putting direct business fibre and hardware through the company makes much more sense.