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Fin24.....The rand extended a slump after breaching R13/$ for the first time since December as investors bet there’s little chance the SA Reserve Bank will follow emerging-market peers in raising interest rates.

Some forum members here are resident overseas as I am so must warn them that the SA tax system may not apply to them.

In my case with my investments in SA I cannot use the "Calculation 1" as all transactions must be first be converted to Euros before the Capital Gain/Loss is calculated. This method will include the FX movement.

This allows me to reset my Base Cost should the ZAR tank back to 16 or 17. I would sell all and repurchase them and this would give me a Capital Loss and a new higher Base Cost going forward even if in ZAR terms I made a gain.

Portugal has a 1 year holding for CGT where SA has a 3 year term.

To make it simple, lets keep at the same entry price and have the Rand go to 20.

Calculation 1.

Purchase Cost: $10 000.00
Proceeds:        $10 300.00
Gain:              $     300.00

Now you convert to Rand.  $300.00 x 20 = R 6 000.00
Your gain to SARS is R6 000.00

Calculation 2. (Actual Gains )

Purchase Cost (In Rands) R160 000.00
Proceeds in Rands:          R206 000.00 (20 x 10 300 )
Gain:                             R  46 000.00

Massive difference that you have to take in consideration.         

I have posted about this some years ago but as more investors have gone into foreign markets I will bring it up again.

According to SARS, if you exchanged Rands to USD and invested in any foreign market then all your calculations must be in USD. Your gain or loss must however be converted to Rands only AFTER the calculation.

This can make a huge difference so be careful. Here is an example and please correct me if I had a brain fart.

If the FX rate was R16 and you bought R160k worth of ACME shares then you will have $10k worth of shares.
Now 3 years later you sell when the share has increased in value to $10 300. but the Rand has strengthened to R12. Then;

Calculation 1. (As required by SARS)

Purchase Cost: $10 000.00
Proceeds:         $10 300.00
Gain:               $     300.00

Now you convert to Rand. $300 x 12 = R3 600.00
Your gain for SARS is R3 600.00.

Calculation 2. (your actual loss- yes - loss)

Purchase Cost ( in Rands): R160 000.00
Proceeds in Rands:            R123 600.00 (12 x 10 300 )
Loss:                                R 36 400.00

A huge difference as SARS does not allow currency movements in foreign investments.

What spurred me on was this SA guy that I have been following for years. Only wish I had done so when I was younger.

No one seems to be working in SA anymore. Things have slowly deteriorated since we left 4 years ago.

Requested a money transfer from my broker account to my FNB account. Money left but 10 days later still not showing up in my FNB account. After a squabble between my broker and FNB the money eventually showed up. Not sure what happened but I did smell a con.

My SA accountant sent me an inflated bill for filing my Exit Tax. I did all the calculations and she only had to enter the "Purchase and Sale" amounts. Two figures for her bill of around R14k!!! The SARS system auto calculates the CGT. The only thing that seems to work well.

I then query the fact that she never sent me a bill with the VAT and other itemized figures on her company letterhead. Just a plain email with the amount. She never replied and does not answer my emails anymore. I have not paid her and it has been about 4 months. I smelt a rat when I saw her religious signature on her emails.

This accountant had an agent from SARS assigned to me and he corresponded with me as to the Exit Tax. He gave FNB a reference number for payments. The payments were made and the money disappeared from my FNB account.

Then lo and behold. All the emails from the SARS agent disappeared or self destructed from my email account. Now the SARS website shows no payments were made and nothing owing. 

Two weeks ago I requested a money transfer from FNB to me in Portugal but nothing kept happening. I then resent the request with nothing happening again. Each time I got an automated response.

Posted on hellopeter and got a response and a reference number ON A SATURDAY. Today the manager at the nonres center sent me an email saying that no requests for the money transfers were made.

I forwarded her the 2 auto responses that proved the requests were made. Now it is being escalated.

WTF is going on here? 

Tried to delete my previous post to no avail. I don't want to incite violence here.

That's a very good idea. I will start looking into it. Thanks P.