Warranties and indemnities are essential elements in any agreement for sale. The distinction between warranties and indemnities is critical as the remedies to which an innocent party will be entitled to will differ. Today, we discuss the differences, the consequences of a breach, and what you need to know before allowing or disapproving a warranty or an indemnity in an agreement for sale.
The Finance Act No. 22 of 2022 amended the Income Tax Act by increasing the rate of Capital Gain Tax (CGT) from the rate of 5% to 15%, effective from 1st January 2023. What is Capital Gains Tax (CGT)? CGT is a tax imposed on the gains which accrue on transfer of property situated in Kenya, on or after 1st January 2015 whether or not the property was acquired before 1st January 2015. A transfer of...
The High Court of Kenya recently issued judgement on a case on Value Added Tax (VAT) and held that one cannot separate land and the commercial buildings on it, thus maintaining that VAT is chargeable at 16% on the total value of the property.
Landlords in Kenya are required to account for tax on rental income either on monthly basis or annually depending on the nature of the rental income received.
Section 35 (1)(c) of the Income Tax Act provides that any person making payment to any non-resident person is required to withhold tax on payments of rent, premium or similar consideration for the use or occupation of property.
Installment tax is advance tax which is payable during the year of income. This is done before the accounts are done and finalized at year end in order to establish the actual tax payable.
The Kenyan law provides for a simplified tax regime on residential rental income ranging from KES 288,000 to KES 15,000,000 per annum. Under this regime, tax is calculated as 10% on gross rent received and is a final tax.
The simplified tax regime on residential rental income was introduced in Kenya with effect from 1st January 2016.It applies to residential rental income ranging from KES 288,000 to KES 15,000,000 per annum. Under this regime, tax is calculated as 10% on gross rent received and is a final tax.The landlord is required to file a monthly return and make payment by 20th day of the following month.The penalty...
The purchase of land or property is capital intensive and tax compliance is vital. Tax implications to the buyer The buyer is required to pay stamp duty on the acquisition of land. The stamp duty is calculated at 4% of the value of land while a 2% applies in instances where the land is located in other areas. Stamp duty is based on the value ascertained by a government valuer. This is done in...