Author Topic: Tax  (Read 99913 times)

Patrick

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Re: Tax
« Reply #285 on: April 30, 2016, 11:25:41 am »
My emigrating out of SA and keeping my investments in SA is a sore point. My portfolio will be deemed as sold on a certain date unknown to me as yet and I will have to pay tax on the gains at either income if SARS sees it as "not held for 3 years yet according to section 9C" or as CGT as all the websites state.

Section 9H might complicate this.

If I have to pay as "income" , my liability will be 40%. This will send me back to SA. I will not survive with this reduction.

CGT on the otherhand will be a mere R70 000.00 and I can live with this.
What was the outcome here Orca? I'm guessing by the fact that you're still abroad that you paid only CGT?

Orca

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Re: Tax
« Reply #286 on: April 30, 2016, 06:30:46 pm »
I contacted a chartered accountant Hugo van Zyl. He specializes in cross border tax stuff. He advised me that as I have Officially Emigrated, I have no more tax liabilities to SARS.
I have not paid a cent but am doubting his advice.
SARS has not contacted me and I am the type that will ignore this as it will go away then.
I will copy and paste his reasoning if I can find his email.
I started here with nothing and still have most of it left.

Orca

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Re: Tax
« Reply #287 on: April 30, 2016, 08:35:42 pm »
Here.
I started here with nothing and still have most of it left.

Tovad

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Re: Tax
« Reply #288 on: June 11, 2016, 09:33:39 am »
Nevermind I re-read the second part and it is only a CGT event if the capital returned is more than the acquisition cost....

I noted a new tax section regarding a capital return that could trigger a CGT event  in my Standard Bank CGT statement (see at end):

My interpretation (am I right?) is that this could affect Aspen which does not pay a dividend but use a "capital returned".
(1) If share bought before 1 Apr 2012 then its cost is reduced by the capital returned
(2) If share bought after 1 Apr 2012 then it triggers capital gains event for the tax year in which the capital is returned

Paragraph 76B: Reduction in base cost of shares as result of distributions

(1) Applicable to pre-valuation date assets
Where a return of capital or foreign return of capital by way of a distribution of cash or an asset in specie is received by
or accrues to a holder of a share and that return of capital or foreign return of capital is received by or accrues to the
holder on or after 1 April 2012 but prior to the disposal of that share and the share constitutes a pre-valuation date asset
in relation to the holder of that share, then for purposes of determining the date of acquisition of that share and the
expenditure in respect of the cost of acquisition of that share, the holder of that share must be treated as:
i. having disposed of that share at a time immediately before the return of capital or foreign return of capital is received or
accrued for an amount equal to the market value of the share at that time; and
ii. having immediately reacquired that share at that time at an expenditure equal to that market value less any capital
gain that would have been determined had the share been disposed of at market value at that time; and increased by
any capital loss that would have been determined had the share been disposed of at market value at that time, which
expenditure must be treated as an amount of expenditure actually incurred for the purposes of paragraph 20(1)(a).

(2) Applicable to post-valuation date assets
Where a return of capital or foreign return of capital by way of a distribution of cash or an asset in specie is received by
or accrues to a holder of a share and that return of capital or foreign return of capital is received by or accrues to the
holder of that share on or after 1 April 2012 but prior to the disposal of that share, the holder of that share must reduce
the expenditure in respect of the share by the amount of that cash or the market value of that asset on the date that the
asset is received by or accrues to the holder of that share. Where the amount of a return of capital or foreign return of
capital referred to above exceeds the expenditure in respect of the share of which that return of capital or foreign return
of capital is received or accrues, the amount of the excess must be treated as a capital gain in determining the aggregate
capital gain or aggregate capital loss of the holder of that share for the year of assessment in which that return of capital
or foreign return of capital is received by or accrues to the holder of that share.
« Last Edit: June 11, 2016, 09:44:56 am by Tovad »

Moonraker

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Re: Tax
« Reply #289 on: June 11, 2016, 02:45:14 pm »
Nevermind I re-read the second part and it is only a CGT event if the capital returned is more than the acquisition cost....

I noted a new tax section regarding a capital return that could trigger a CGT event  in my Standard Bank CGT statement (see at end):

My interpretation (am I right?) is that this could affect Aspen which does not pay a dividend but use a "capital returned".
(1) If share bought before 1 Apr 2012 then its cost is reduced by the capital returned
(2) If share bought after 1 Apr 2012 then it triggers capital gains event for the tax year in which the capital is returned

Return of capital on or after 1 April 2012 on post-valuation date shares.

Only base cost is reduced - no CGT (unless the return of capital was greater than the original base cost when there would be CGT payable and the base cost would of course be nil - Very unlikely and rare I would assume).

Remember pre-valuation date is 1st October 2001. I assume you aquired APN after that date. If not it gets a little more complicated.

I also have APN - dividend was paid by way of a capital reduction - the base cost was lowered accordingly and definitely no CGT.
CGT only payable on disposal of APN (if held on capital account).

"With effect from 1 April 2012 a return of capital will no longer trigger a part-disposal of a share. Instead, it will be treated as a reduction of the base cost of the share."



216 cents per ordinary share was the last dividend by way of capital reduction (no cgt and no withholding tax).

Tovad

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Re: Tax
« Reply #290 on: June 11, 2016, 08:10:39 pm »
Ok thanks - yes SB Securities did the same to my APN base cost but as they do not always do things right regarding CGT I was worried there for a while until I re-read the wording - I agree that it is unlikely unless a share increase by 30x or more - Aspen was about R 130 in 2012...
« Last Edit: June 11, 2016, 08:33:26 pm by Tovad »

Moonraker

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Re: Tax
« Reply #291 on: June 12, 2016, 08:34:06 am »
Ok thanks - yes SB Securities did the same to my APN base cost but as they do not always do things right regarding CGT I was worried there for a while until I re-read the wording - I agree that it is unlikely unless a share increase by 30x or more - Aspen was about R 130 in 2012...

What I mean is this :-

On or after 1 April 2012 a return of capital must be deducted from the base cost of your shares.
If the base cost becomes negative as a result of the deduction of the return of capital the excess is treated as a capital gain

Example from SARS:-

Base cost 150
Less: Return of capital (400)
Capital gain 250
The base cost of the shares going forward will be nil.

Just for clarification - this will probably never happen.