August 4, 2022

Hey, Generation Y and Generation Z!

Do you think you can retire comfortably? Millions of South Africans rely on the money saved in their employers’ retirement fund to earn an income when they retire.  For many people, this is their only formal savings for retirement. Unfortunately, too often, this money is still not enough to sustain them in retirement. Being a young professional has its fair share of demands and complexities, with real day-to-day demands such as housing, transportation, and health needs all perpetually competing for a share of your wallet. Retirement savings, quite frankly, is a low priority for many. However, research shows that it […]
August 4, 2022

Section 24C Allowance: Future expenditure

The nature of a taxpayer’s business may be such that the taxpayer receives amounts under a contract that will be used to finance expenditure to be incurred in future in performing under that contract. Generally, this would result in an inclusion of the amount in that taxpayer’s income in that year of assessment. In contrast, a deduction for the expenditure incurred will only be available in a future tax year. An adverse tax liability would, therefore, arise in the year of receipt of the amount. Section 24C of the Income Tax Act No. 58 of 1962 (“the Act”) serves as […]
July 6, 2022

Section 42: Asset-for-share transactions

It is often the case that South African tax resident shareholders wish to reorganise their South African group of companies, for a multitude of commercial reasons, without the ultimate shareholders changing. One of these could potentially be to create a single holding company structure. Various group relief provisions are contained in the Income Tax Act No 58 of 1962 (“the Act”) which can be utilised to reorganise group structures in a manner that is tax neutral, i.e., without immediate tax consequences for its underlying shareholders. Section 42 of the Act is one such group reorganisation provision. Section 42 or ‘asset-for-share transaction’ […]
July 6, 2022

Lost your original title deed? What do you do?

Before the transfer takes place, the owner (seller) must make a written application to the registrar of deeds, requesting a certificate of the registered title (CRT) of the land in terms of  Section 38 of the Deeds Registries Act 47 of 1937. The application must be accompanied by an affidavit attested to by the owner of the property. Upon receipt of the application and affidavit, the registrar of deeds must publish a notice that he/she intends to issue the certificate of registered title. The notice must be published in two consecutive ordinary issues of the Government Gazette and two consecutive […]
July 6, 2022

The subdivision of Agricultural Land Act No. 70 of 1970 explained: Part 1

The subdivision of agricultural land or “farmland” is regulated by the Subdivision of Agricultural Land Act No. 70 of 1970 (hereafter “the Act”) which came into operation on 2 January 1971. Baker J, in the case of Van der Bijl v Louw, stated that the Act has its purpose in preventing the situation where farming units are created which are not economical or could be described as non-viable subunits. This prevention objective is achieved in essence by the Minister of Agriculture, Land Reform and Rural Development of South Africa, who has to give their consent before any subdivision may lawfully be […]
July 6, 2022

Home office expenditure

Taxpayers who are salaried employees have limited deductions available to them. However, home office expenditure can be claimed as an income tax deduction, but the onus is on the taxpayer to prove that the expenses are in fact deductible. For employment to constitute a “trade” and to qualify to deduct home office expenditure, the taxpayer should prove that the home office: Is specifically equipped for this purpose: the home office must be equipped with the necessary tools and equipment required to render the trade (desks, chairs, computers, printers, trade-specific equipment, etc.). A lounge, living room, or empty, unoccupied room will […]
June 28, 2022

Individual filing opening

Taxpayers, your turn to file your tax return started on 1 July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July.  No need to call us, we will send you an SMS if you are selected to be auto-assessed.  However, we have made it much easier this year. When you receive the SMS, log into eFiling or MobiApp to view your assessment. If you agree with the assessment there is nothing more to do – if a refund is due, we will pay […]
June 8, 2022

Transfer duty. No surprises. Part I

Transfer duty is a duty levied for the benefit of the National Revenue Fund on the value of any property acquired by any person by way of a transaction or in any other way, or on the amount by which the value of any property is enhanced by the renunciation of an interest or restriction upon the use or a disposal of that property. The value of the duty is determined by the Minister of Finance and is based on a sliding scale relative to the value of the property. Property is defined in the Act to mean land in […]
June 8, 2022

Wear-and-tear allowance

Capital expenditure incurred in the production of income and in carrying on of a trade does not qualify for a deduction under the so-called general deduction formula in section 11(a) of the Income Tax Act No 58 of 1962 (the Act). The Act does, however, grant deductions or allowances for specific types of capital expenditure that a taxpayer incurs in carrying on its trade. These deductions or allowances are generally spread over several years, whereas section 11(a) provides for a full deduction in a single year. The most-commonly-used section of the Act that allows for capital allowances is section 11(e). […]
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