October 14, 2022

Testamentary trusts still have their place

How you can protect your assets from predators—including SARS. Trusts have received a lot of bad press over the past few years, what with SARS taking a dim view of the use of trusts as a means of avoiding tax. A 2008 case involving a property trust, where the beneficiaries were changed in the hope of avoiding the payment of transfer duty, is but one example of SARS’ increased vigilance when it comes to trusts.  In this particular case the loophole was closed, and the court found that transfer duty was in fact payable. So does this mean that trusts […]
October 14, 2022

Bribes, penalties, and fines: Don’t expect help from SARS

Deductions are disallowed under Section 23(o)—but it’s not quite cut and dried… The meeting went on longer than you expected, and now you’re rushing to get to your next appointment.  It’s a new client, and a successful deal will be lucrative both for your company and this month’s commission cheque.  But not five minutes after you get onto the freeway, some plod with a hairdryer in his hand is waving you over to tell you what your speedometer already knows—if only you’d bothered to look. Then the next day your boss comes into your office, informing you that your territory […]
October 14, 2022

Beware the ‘Ides of SARS’

Telephonic audits are on the rise “A soothsayer bids you beware the ides of March”.  These famous Shakespearean words forewarning the misfortune of Roman emperor Julius Caesar (which Caesar ultimately ignored and led to his demise) may not be as archaic as appears at first sight—especially in the realm of tax, and when SARS’ new ‘audit strategy’ is considered. In recent months we have seen a substantial spike in SARS contacting taxpayers directly (even with the appointment of a registered tax practitioner or legal representative), either telephonically, or via email correspondence, seeking additional information / confirmations from the taxpayer. A […]
September 9, 2022

Ceasing tax residency: Changes on the horizon for interest and capital gains

Section 9H of the Income Tax Act provides that a natural person’s year of assessment is deemed to have ended on the date immediately before the day on which that person ceased to be a resident for South African tax purposes. Furthermore, that person’s subsequent tax year is deemed to commence on the day that person ceased to be a tax resident for South African tax purposes. This effectively creates two years of assessment during a single 12-month tax period which would ordinarily constitute a single year of assessment beginning on 1 March and ending at the end of February […]
September 9, 2022

Taxation of variable remuneration: Changes are coming

The Draft Taxation Laws Amendment Bill was published on 29 July 2022. The bill’s publication marks the start of the tax legislative amendment season. The proposed legislative amendments are currently open for public comment and participation. Executives and payroll administrators should take note of a proposed change to the way in which variable remuneration will be taxed, particularly from a timing perspective. Currently, section 7B of the Income Tax Act provides for the matching of the timing between accrual and payment of various forms of variable remuneration. As a result, any amount of variable remuneration paid by an employer to an […]
September 9, 2022

Tax implications of cross-border remote working

When remote workers are located outside of SA, the tax issues get complicated Remote working from foreign jurisdictions has become increasingly popular during the COVID-19 pandemic. Despite the lockdown rules being relaxed in most jurisdictions, it appears that employers should not expect the workplace to return to the way it was before the pandemic. For example, Microsoft 365 corporate vice-president Jared Spataro said: “As organisations around the world make the definitive shift from remote to hybrid work, one thing is clear: the people who went home to work in 2020 are not the same people returning to the office in […]
September 9, 2022

Distributing retirement fund death benefits

Making benefit allocations equitably and fairly AS PER Section 37C of the Pension Funds Act, once trustees have identified dependants of a deceased member, the next step is to allocate the death benefit in a proportion they deem fit.  This article highlights some of the key factors in making this determination. Section 37C grants trustees at least 12 months to search for dependants, but the timeframe for allocating benefits depends on the completeness of the information provided, as well as the response time of the dependants and nominees.  While trustees should aim to distribute the death benefit as quickly as […]
August 4, 2022

Submit your return on time, or face penalties

Non-residents and earners of foreign income are also receiving extra attention this year The tax season for the 2022 tax year has just started, and it will be one of the shortest to date.  The period to submit tax returns opened on 1 July 2022 and runs to 24 October 2022 for individual taxpayers who are not provisional taxpayers. Determining whether you need to file a tax return On 3 June 2022, SARS Commissioner Edward Kieswetter declared who he requires to file a tax return for the 2022 filing season. In general, you only need to submit a tax return […]
August 4, 2022

Don’t lose that assessed loss!

Assessed losses can be carried forward—provided that the company doesn’t cease trading If the amount of allowable deductions exceeds the taxable income in your business, you will end up with what is known as an ‘assessed loss’ for tax purposes.  In terms of Section 20 of the Income Tax Act, you are entitled to carry forward this assessed loss and set it off against taxable income in future years. This loss can be carried forward indefinitely, provided that you carry on a trade during the year.  If there is no trade at all during a tax year, and there is […]
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