Davey’s Locker
Excess contributions to provident funds
Relief coming soon In circumstances in which annual tax-deduction limits to retirement fund contributions are exceeded, a taxpayer may carry forward the nondeductible portion to the following tax year, under s 11F of the Income Tax Act.Ultimately, upon retirement,...
Provident fund annuitisation revisited
Tax harmonisation of retirement fund contributions As from 1 March 2016, all contributions to retirement funds (pension, provident and retirement annuity funds) are treated similarly for tax-deduction purposes, under s 11F of the Income Tax Act. The tax-deduction...
Soft loans to nonresident trusts revisited
And more on s 7C of the Income Tax Act In 168 TSH 2017, I examined the interaction between the various sections of the Income Tax Act pertaining to resident funders of nonresident trusts. It is time to revisit this topic. Attribution rules (s 7(8))Section 7(8)...
Emigration and retirement fund access
In my previous article ‘Foreign employment income amendments’ (192 tsh 2019), I focused on the tax tests allowing one to achieve nonresident status. The further issue arises of the ability of an emigrant to access his or her retirement funds, and the tax treatment of...
State-capture beneficiaries and tax
An Al Capone strategy better than problematical prosecution In 189 TSH 2018 I canvassed aspects of donations tax relevant to ‘state capture’. Now it is time to look at its income tax implications. SARS’s mandate (updated 27 February 2019) is to ensure tax collection...
Foreign employment income amendments
Myths abound ‘Financial emigration’ Amidst the panic created by the amendments to s 10(l)(o)(ii) of the Income Tax Act, which, with effect as from 1 March 2020, will subject to tax in the RSA foreign employment income in excess of R1 million earned by RSA taxpayers...
Section 7C revisited
Dynamic tax environment can create opportunities Sometimes amendments to the tax legislation, albeit unwittingly, can have favourable results for a taxpayer. As the saying by the inventor, Alexander Graham Bell, goes, ‘when one door closes, another opens’. An example...
Late objections and appeals
Issue 5 of Interpretation Note 15 On 21 December 2018, SARS issued an updated Interpretation Note 15 (Issue 5). This pertains to the exercise of a senior SARS official’s discretion to condone a late objection or appeal. The legal principles underlying the relevant...
Donations tax conundrums
Festive gifts It’s the festive season and ’tis the season for giving. Maybe it is coincidental that the topic of donations to political parties, high-profile persons and others features prominently in the press. Donations tax is levied by s 54 of the Income Tax Act,...
Externalising a business – The Sequel
In last month’s article (187 TSH 2018) I examined the concept of ‘effective management’ as dealt with in the SARS Interpretation Note 6 (Issue 1). A reader, Patrick Emmett, a senior tax consultant at Mazars, has correctly pointed out that SARS has also published an...
Externalising a business – Tax factors to consider
In the scramble for the externalisation of investments as a rand hedge, using the annual foreign R1 million discretionary and R10 million investment allowances, schemes to externalize a business or part of it are surfacing. Place of incorporation The definition of...
Retirement Tax Fund
Provident fund annuitization I canvassed the harmonization of all retirement funds (pension, provident and retirement annuity funds) in 153 TSH 2015. In essence, as from 1 March 2016, contributions to such funds are treated similarly for tax purposes. Thus provident...