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General Category => Shares => Topic started by: Snakepit on February 20, 2014, 09:06:04 pm

Title: Buying shares from a friend?
Post by: Snakepit on February 20, 2014, 09:06:04 pm
I have a friend that needs cash and I am interested in buying shares that he has. He bought it for R10 per share and the share price has fallen down to R8.00 per share. I have time to wait for it to climb back to it's previous highs. He does not. I am offering him R8.10 per share and he is willing to let it go.

Is it possible to do a direct transaction from him to me?
Title: Re: Buying shares from a friend?
Post by: gcr on February 20, 2014, 10:36:16 pm
Quote from: Snakepit on February 20, 2014, 09:06:04 pm
I have a friend that needs cash and I am interested in buying shares that he has. He bought it for R10 per share and the share price has fallen down to R8.00 per share. I have time to wait for it to climb back to it's previous highs. He does not. I am offering him R8.10 per share and he is willing to let it go.

Is it possible to do a direct transaction from him to me?
I am sure you will find that he holds the shares with a broker given that everything is on an electronic platform these days and paper based shares certificates are something of the past. You may be able to change ownership via his broker but it may entail you holding the shares with that broker. Also depending on the length of time that he has held the shares he could be subject to either CGT or even have to declare it as revenue and pay take at his assessed rate. So there are ramifications for you and your mate
Title: Re: Buying shares from a friend?
Post by: jaDEB on February 21, 2014, 08:30:41 am
Why does he not sell on market? best way to do.
Title: Re: Buying shares from a friend?
Post by: Snakepit on February 21, 2014, 10:27:41 pm
Exactly!
Title: Re: Buying shares from a friend?
Post by: Snakepit on February 21, 2014, 10:29:13 pm
A similar case would be when I want to transfer my shares to my kids.
Title: Re: Buying shares from a friend?
Post by: Orca on February 22, 2014, 08:09:53 pm
Quote from: Snakepit on February 21, 2014, 10:29:13 pm
A similar case would be when I want to transfer my shares to my kids.

Your broker can do that but tax complications come to play. All gains made by those shares will be for your account until your demise.

My case:
I donated R270k to my wife and she bought shares with it. The capital is hers and allowed tax free by SARS but any gains made are for my account. 

I think the OP's seller wants that Capital loss for his benefit.
Title: Re: Buying shares from a friend?
Post by: Orca on February 22, 2014, 09:04:41 pm
Quote from: qriffin on February 22, 2014, 08:33:29 pm
I don't think CGT comes into play WRT this specific situation the OP finds himself in

A loss is a loss albeit CGT or Trading and is deductible.