March 16, 2023
You could improve your return by selling the share instead of waiting for the dividend payout—but there are caveats. I was recently asked an interesting question about dividends. The person concerned was curious as to whether—from a tax and return perspective—it is better to take the dividend itself, or sell the share and take the profit prior to the dividend payout. It is therefore important to understand how the declaration and subsequent payment of a dividend impact the share price, all else being equal. The easiest way to explain how this works is through a real-life example—that of thermal coal […]
March 16, 2023
Whether you are a share trader or a long-term investor, when you make a profit, SARS will want its slice of the pie Ever since biblical times, there has been a tug-of-war between governments trying to extract as much as possible from their citizens in the form of taxes, and individuals trying to keep as much of their income and wealth away from those very same governments. In South Africa, owners of shares have not historically needed to worry too much about the tax man—especially if they considered themselves to be long-term investors. This is because any profits made when […]
October 14, 2022
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 […]
September 9, 2022
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 […]