Share Forum - Discuss JSE shares and join the Investor Challenge

Though the market has dropped quite a bit this week it is still at 39,070.56 (ALSI) so need for panic just yet - see DOW has made a small recovery so far today

The sensible investor will pick a couple of shares which have consistently done well as bankers with a view to achieving a 15% portfolio growth p.a.

Not sure how your system works but could use the first traded price per the morning auction

Last I looked there were 299 competitors - not bad for a new competition - well done Patrick

From my experience Orca is spot on the money. SARS will not see you as one all encompassing entity in his example - as an individual you are well within your rights to own a property on capital account (primary residence) and a second property on revenue account (rental property). These are treated differently for the purposes of your tax submission.

The same goes for your investment portfolio versus your trading account (recommended that you keep them separate). Your intention in your investment portfolio is clearly capital in nature, as will most likely be evident in your treatment thereof (ie you won't necessarily be buying and selling, in other words trading, with this account). While your intention in your trading account will be one of generating revenue. It all comes down to intention.

Believe me I follow your logic, but here's the rub.
You are a normal working person who receives a fixed monthly salary (income), you have an investment account with a broker and you buy and sell shares within the parameters of SARS dictates. Now you open up an SSF account with the same or another broker and you trade over this account, and lets say you make a profit of R100,000 in the year (arbitrary figure). When you get to the portion stipulating your income for the tax year you will have to declare - your salary, any other benefits and any other income. Now the R100,000 profit becomes income, and could be taxed at your marginal tax rate (maybe as high as 40%) or the tax man may tax you at a rate commensurate with your net tax position - which could be a lower overall figure than the 40%. If you know before hand which way the tax man is going to access you then at least you can decide whether to claim deductions for the trading leg of your portfolio - so that is what I am trying to determine before writing or discussing with SARS. What I don't want is a witch hunt after entering into discussions or correspondence

This is a general question to which I welcome some insights
My portfolio as it stands currently is treated as an investor portfolio upon which I pay CGT on profits at time of sale.
I recently attended a seminar on SSF's (have been on such seminars on CFD but am not interested in these instruments) and am contemplating looking at SSF's as a trading/investment option. I have raised the question of tax with the presenter specifically in that I wanted SARS to treat my 2 portfolios separately. Thus all activity over SSF's would be treated as income and I would be taxed accordingly, but I don't want this income to be aggregated with my pension and thus push me up into a new tax bracket and thus pay more tax. He suggested that to not get the income from SSF's aggregated with my pension that I may have to open up a company account and thus income would be subject to company tax rules. If I read reports on opening company accounts and the red tape and nonsense that goes with it, it seems a daunting task.
So my question is - is there anyone on the forum who has managed to get SARS to partition their share activity into investment and trading but with minimal tax implications.
Should nobody have managed to achieve this, then my next port of call would be to write to them with a scenario, and ask them for input on how this can best be done, and what their suggestions would be - would also be willing to have meetings with SARS in need to get a clear understanding of what the rules would be. My biggest concern being that you go down a path only to find that it doesn't work like that and you can never get back to the original situation
Please feel free to comment - on the basis that I don't have the answers       

Well my percentage profit on base purchase price now stands at 160% on CML and has surpassed my Woolworths which are on 137% - both bought at the same time. In Rand terms of profit Woolworths is still significantly more because I hold more Woolies than Coronation

The principles around CGT are that you pay on the total profit you make between base cost and selling prices (buying and selling brokerage is incorporated) so one is talking net profit. However if you sustain a loss in terms of share operations then that loss can be rolled over to the next tax year and can be used to low the CGT assessment