Thread split from the investor challenge thread - Patrick
Now you pay tax on your gains as a Trader. Every cent that you gained will be added to any other income you have and be taxed accordingly.
I have learned my lesson. If you sell, say R1M after a 50% gain and you are in the 40% tax bracket, you will pay an amount of R193 600 tax on your R500k gains after the R16k costs as it will be revenue.
Now as you probably do not have the extra cash on hand, you will withdraw the money from your cash account at your broker to pay SARS. This will leave you with R806 400 in your investment account. A loss of just under 20%.
If you expect the market will drop by more than 20%, then by all means, sell.
I will hold even though I know the VIX is high.
Ah that number was my addition. I was under the impression that it was 25% of the capital gain would be added to your income. Meaning a max of 10%. Do you have a sars link?
Thanks for letting me know. That sucks on so many levels :wall:
The inclusion rate is 33.3%Thanks for letting me know. That sucks on so many levels :wall:
well, basically it means that where you previously got 75% of your growth tax free, you now only get 66.7% of your growth tax free when keeping your shares > 3 years
And if SARS sees you as a trader, then the R1000 gain will be added to your income with NO exclusion. If your marginal tax rate is 40% then your effective tax on the gain is 40%. Not so Moon?Yes Orca, if you are a trader. If not then it is 13.32% if your marginal tax rate is 40%.
We don,t loose 20 or 13 %, that is our part to finance the powers that be :'(
I am comfortable being a trader and follow the various market segments, If I was an investor, i would put my my money in a fund, either unit trust or maybe satrix ind. and just sit back and relax.
But the share market is my hobby, like riding bike is to some people
That email stated that if I earn less than R250k then I need not submit a return. The threshold is R63556.00 !!!No such luck Orca,
I don't understand and I'm only on my 2'nd beer.
Piet Nel, project director for tax at the South African Institute of Chartered Accountants (Saica), explains that these requirements include that an individual may only earn salary income from one employer. In principle they would only have one IRP5 (a tax certificate from his or her employer), he says.
Additionally, the person may not earn other taxable interest or rental income and is also not entitled to any tax allowances for medical contributions, retirement annuities or business travel expenses.
The government Gazette confirmed that individuals who do earn interest, but would be exempt from paying tax on it because the tax is less than the annual interest tax exemptions (R22 800 for individuals under 65 and R33 000 for persons 65 years and older), would not need to submit a return based on this income alone, he says.
Another tax question.I spoke to Simon Brown regarding SARS treatment of an individual who has an investment account with a broker and a trading account with the same broker, he assures me that SARS will treat the activity and the intent on these two accounts separately - so in one sense you are treated as an investor and separately on the trading account you will be assessed as a trader. I did not have long enough to raise all the question I still have but he did say that my broker should be well versed in these matters as they are in fact offering these options to other clients. On the other point, when you complete your e filing SARS return you only need to give base costs and proceeds - there is no room for listing how you arrived at these figures, and the system determines the amount you will be assessed for CGT - however if you have an accumulated loss then this is deducted before CGT is calculated. One of the problems I have is that many of the calculations are hidden to the taxpayer so you never know whether you are being ripped off or not. I have just sold some U/T's because they are not performing and these I have held since the '90's and now in terms of CGT SARS will score exceptionally on an item which wasn't even subject to CGT in the '90's - what they should do is allow you to use the price of the U/T at time of introduction of CGT - but this is unlikely to happen when dealing with an overzealous collector of taxes
If you have your account managed by a brokerage firm in their Managed Portfolio Account such as Imara SP Reid has, and they often swop stocks then you are considered a trader. Losses and gains must be added to your other income.
If you have Unit Trusts that you keep for 10 years and although the stocks within the UT's are also sold and replaced from time to time, you will not be liable for tax until you sell the UT.
Am I correct?
Another tax question.I spoke to Simon Brown regarding SARS treatment of an individual who has an investment account with a broker and a trading account with the same broker, he assures me that SARS will treat the activity and the intent on these two accounts separately - so in one sense you are treated as an investor and separately on the trading account you will be assessed as a trader. I did not have long enough to raise all the question I still have but he did say that my broker should be well versed in these matters as they are in fact offering these options to other clients. On the other point, when you complete your e filing SARS return you only need to give base costs and proceeds - there is no room for listing how you arrived at these figures, and the system determines the amount you will be assessed for CGT - however if you have an accumulated loss then this is deducted before CGT is calculated. One of the problems I have is that many of the calculations are hidden to the taxpayer so you never know whether you are being ripped off or not. I have just sold some U/T's because they are not performing and these I have held since the '90's and now in terms of CGT SARS will score exceptionally on an item which wasn't even subject to CGT in the '90's - what they should do is allow you to use the price of the U/T at time of introduction of CGT - but this is unlikely to happen when dealing with an overzealous collector of taxes
If you have your account managed by a brokerage firm in their Managed Portfolio Account such as Imara SP Reid has, and they often swop stocks then you are considered a trader. Losses and gains must be added to your other income.
If you have Unit Trusts that you keep for 10 years and although the stocks within the UT's are also sold and replaced from time to time, you will not be liable for tax until you sell the UT.
Am I correct?
But they do !
what they should do is allow you to use the price of the U/T at time of introduction of CGT - but this is unlikely to happen when dealing with an overzealous collector of taxes
Yes, the collective schemes act means that the UT's don't pay CGT, but as a holder you need to pay CGT when you sell units applying weighted average cost.
If you have Unit Trusts that you keep for 10 years and although the stocks within the UT's are also sold and replaced from time to time, you will not be liable for tax until you sell the UT.
Am I correct?
Yes, the collective schemes act means that the UT's don't pay CGT, but as a holder you need to pay CGT when you sell units applying weighted average cost.
Oh oh, a difficult one. I have never been a UT investor, but would venture to say, seeing that all the trading is done by the UT management companies, one would not get taxed as a trader.Yes, the collective schemes investment act means that the UT's don't pay CGT, but as a holder you need to pay CGT when you sell units applying weighted average cost.
Any idea if you'd get taxed as a trader for selling unit trusts before the 3 year period is up? My UT has recently upped the fees and I'd be much happier putting those funds into ETFs.
Oh oh, a difficult one. I have never been a UT investor, but would venture to say, seeing that all the trading is done by the UT management companies, one would not get taxed as a trader.Yes, the collective schemes investment act means that the UT's don't pay CGT, but as a holder you need to pay CGT when you sell units applying weighted average cost.
Any idea if you'd get taxed as a trader for selling unit trusts before the 3 year period is up? My UT has recently upped the fees and I'd be much happier putting those funds into ETFs.
Anyone ?
not sure I'm following you.... AFAIK, with shares, if you are a private entity, you are only liable for tax on any gains once you sell
Just got all my ducks in a row this weekend. Printed out what I could but will give my accountant my Login details if she needs more info.
Looks bad atm as I really churned my account for 4 years. Mixed trading with investing on the same account.
We live and learn.
Off to see my tax accountant tomorrow. She says that the "Voluntary Disclosure" might not help as they would have picked it up sooner or later.Orca - I don't know whether it will help, but, maybe you need to argue with SARS on the basis that your intent has always been to obtain growth to lessen the likelihood of you making a claim to the state for financial support and also to be self supporting. Further you have a financial responsibility to yourself to protect yourself from market crashes and what transpired in 2007/8 was the second most severe market correction since the depression of 1929/30. Simple fixed investments are for short period of time and yet there is no CGT for not holding a fixed deposit for longer than 3 years so why is SARS targeting investors in the share market with tax on turnover of shares, CGT, and withholding tax - they are being grossly avarice towards a segment of the investing public and they only share in the growth of shares and give back nothing when a tax payer incurs substantial losses. They are not dealing with investors in a very even handed manner at all
VD only helps for certain businesses that can easily hide income from SARS. Churning your JSE stocks WILL get picked up eventually.
So now it is fines, penalties and interest. Plus everything is added to my income. :wall:
gcr, did you see my post re: your UT base cost grievance ?Yup did thanks and have amended my figures for SARS accordingly
http://www.shareforum.co.za/shares/tax/msg1251/#msg1251
Just received a quote from a tax accountant to reconcile my trading since 2009. Came to R6 000.00.
Voluntary Disclosure done but no reply from SARS yet.
Had you invested R2m in a hypothetical 60% pa performer or 5%pm and withdrawn R30k pm then after one year, your portfolio would grow to R3.114m.
While I'm on the subject of Donations Tax. A while back when I was more ignorant on tax matters, I thought I was clever by donating half my stocks to my wife to divide my tax burden. This can be done tax free and even my broker was about to transfer the stocks when I found out that it would not work.Yeah, it's a confusing matter. If you transfer assets to your spouse (shares included), you should in my opinion be subject to rollover relief. However be wary of this:
According to SARS, any profits made on this donation will still be for my account. Not my wife's.
Transfers of assets between spouses for the purpose of tax avoidance may result in the capital gain or loss arising in the hands of the transferee spouse being attributed to the transferor spouse under para 68.Check point 3 below:
[email protected]
1.What does roll-over mean and what assets disposed of are subject to roll-over relief?
Where assets are subject to roll-over it means that a CGT liability does not arise upon disposal but is rather deferred until a subsequent event to the extent that proceeds from the disposal are invested in a replacement asset. In the case of transfer of assets between spouses, the spouse disposing of the asset is treated as having disposed of the asset at an amount equal to its base cost and the spouse receiving it is treated as having acquired it at a cost of the same amount.
Assets disposed of under the following circumstances are subject to roll-over relief:
1. Involuntary disposal of certain assets under certain circumstances (Para. 65)
2. Reinvestment in replacement assets, under certain conditions (Para. 66)
3. Transfer of assets between spouses (Para. 67)
Paragraph 67(1)(a) provides that the disposing spouse must disregard any capital gain or loss when disposing of an asset to his or her spouse.
13.3.3 The transferee (acquiring) spouse
Paragraph 67(1)(b) ensures that the spouse to whom an asset is disposed of takes over all aspects of the history of the asset from that person’s spouse and where applicable, from the executor of the deceased estate of that person’s spouse,494 namely,
• the dates of acquisition and incurral of expenditure,
• the expenditure incurred,
• the currency in which the expenditure was incurred,495
• the usage, and
• any amount received or accrued in respect of the asset that would have constituted proceeds on disposal of the asset had it been disposed of to a person other than the transferee.496
494 Paragraph
Now my accountant has put me in a spot. Ask SARS for a VDP (Voluntary Disclosure Progamme) and if granted, the losses will NOT carry over to the next year. Every year will start anew.Eish!!!!! That must put a dent into your Portugal plans?
Do not ask for VDP and I will pay double the tax owed plus interest and penalties. :wall:
But surely a portfolio could consist of two parts, one part being long term investments and the other short term, i.e. tradingThat is the way to go. Split the 2. I never did and will pay for my mistake.
But surely a portfolio could consist of two parts, one part being long term investments and the other short term, i.e. tradingThat is the way to go. Split the 2. I never did and will pay for my mistake.
I have previously read through that SARS doc and that's why I'm assuming 3 years is 'safe' - and that you can actually motivate shorter periods as not being a 'trader' - surely SARS can't conveniently assume if you 'trade' one share, you are now a trader - fukkkkem! :mad:I concur with your last comment. I had dealings with SARS last week and they are the most arrogant collection of people I have come across, and they hide behind the Act and won't negotiate on any matter - there is no grey area whatsoever. They frequently hold themselves up as one of the primary operations within government who work efficiently and effectively but in reality the intelligence levels are pretty dismal
I have another weird tax question.
Let's say you have no other income besides dividends, obviously you pay dividends withholding tax before the money gets into your account, but come tax season, will you be entitled to the primary rebate on some of those dividends?
:wtf: Yesterday I went on SARS website and checked that the "RFC" ie Request For Correction is there. Today I can't find it as I want to correct my returns. It showed that my Adobe is outdated and I updated it. Flash player and reader. Still nix.What version of flash player do you have installed ? http://www.adobe.com/software/flash/about/
Went over to Internet Explorer and SARS shows that I need the latest Adobe??? WTF. I have it.
Went back to Google Chrome and still no RFC. Where has that gone?
have they changed their website?
Just got back from SARS. My tax loss from the 2008/9 crash amounts to -R284k but they say it has prescribed so the loss will not carry over.Orca - since you were unaware of the fact that they were treating you as a trader I believe they should waive the prescription period - I would approach their appeals board to get them to apply leniency. The reality is they can't hide behind the Act when it suites them and then chose to ignore under different circumstances
Any tax loss or money due older than 3 years is prescribed but money owed by you never prescribes.
This will now cost me plenty. The auditors will get back to me within 3 weeks.
Got sorted with the Request for Correction. I had already clicked on it so it stayed open although I could not see it.
What about if you buy shares/etf's monthly over a period of 3years? There's going to be 12 transactions a year 36 transactions in total. Does it mean if you sell all in month 37 you'll only pay cgt?if you sell all in mnth 37, you'll pay CGT on one month and PAYE on 35 months - gotta own the shit for 3 years
Just when I thought I was getting a grip on the tax, I read this in the Comprehensive share holder guide.
Not all sales of shares trigger a tax event.
If you rebalance your portfolio by selling some of share X and adding to share Y within 45 days then;
If you made a gain of R2 000 on the sale of X then this gain must be deducted from the cost price of share Y. This lowers the Base Cost of share Y.
If you made a loss of R2 000 then you must add R2 000 to share Y. This increases the Base Cost of share Y.
:wall:
"same kind and quality" - I wonder how that can be determined? :o$9.7
I'm sure you won't even get two analysts to agree on that
"same kind and quality" - I wonder how that can be determined? :o$9.7
I'm sure you won't even get two analysts to agree on that
The expression ‘share of the same kind and of the same or equivalent quality’ refers to substantially identical shares in the same company.
Thus a shareholder who held a class A ordinary share in ABC Ltd (a listed company) that was forcibly acquired under s 311 of the Companies Act 61 of 1973, who wishes to take advantage of para 42A, must replace that share with a class A ordinary share in ABC Ltd. In the event that the particular class of share is no longer in issue, the share would have to be replaced with one bearing substantially identical rights
In other words, unless what I have highlighted is the case, it must be the same share.
Local dividends
Although dividends withholding tax will automatically be withheld by the dividend-paying company (unless an exemption applies), the tax obligation remains on the shareholder. Dividend withholding tax is a separate tax and does not form part of the normal income tax calculation. This unfortunately does not mean that the taxpayer can ignore the dividends he or she received in their tax return. The gross dividends receipts (pre-dividend withholding tax) must still be included as part of gross income and as a consequence be included in the tax return. :wtf:
Local dividends are however still fully exempt from normal income tax and as a consequence the amount of dividends included under gross income will then be excluded again under the exempt-income section.
For local dividends it must therefore be included in the return and the full amount excluded again; in other words it will be merely an in-out situation.
Rather confusing as no provision is made for this as far as I can see looking at my ITR12.Yes, I had the same problem...
Hick. Burp. Look at the time.
Those guys doing CFD's must be hiding their gains. How can one possibly work out tax when you are doing 6 trades per day?
I find it difficult to do 4 per year.
Hick. Burp. Look at the time.
Those guys doing CFD's must be hiding their gains. How can one possibly work out tax when you are doing 6 trades per day?
I find it difficult to do 4 per year.
Orca and all, request a CGT Tax certificate for the Tax Year from your broker, all your trades, gains and losses are calculated for you. My broker is Ned Priv Wealth (previous BoE) and i request a CGT certificate, they charge R 150. and i give that to my accounting firm. I do a lot of trades per year (around 100) and have no problems with tax, pay CGT on my nett gains.
Hope this helps
Come on guys, play niceWasn't me. Was my pal alf. He even gave me a "smite". :TU:
No vulgar language and targeting of individuals. Everyone is here to learn from each other.
Come on guys, play nice
No vulgar language and targeting of individuals. Everyone is here to learn from each other.
Come on guys, play nice
No vulgar language and targeting of individuals. Everyone is here to learn from each other.
Orca - it does make one wonder if one should come clear with SARS
I take it since 2009 they never discovered your mistakes and you came forward on your own accord? or did they pull the plug on you?
Orca - it does make one wonder if one should come clear with SARS
I take it since 2009 they never discovered your mistakes and you came forward on your own accord? or did they pull the plug on you?
I disclosed all.
My tax consultant told me to not enter into an VDP as the 3 year prescription rule will apply and to just disclose all and the 5 year rule will apply. Not so it seems.
Part 1 of my move to Portugal is done. Got a buyer for my Coffee shop today.@ Orca
Now if I add this money to top up my current stocks, how will this affect the 3 year thingy?
I presume the new shares will start on this new date. Am I correct?
Aragorn, if I read you correctly, you are saying that ETF's are exempt from the 3 year thingy?No, not at all.
That's what got me into trouble. I was under the impression that I could buy and sell as I wished and as long as the gains are not withdrawn into my bank account for my personal use, it would not be considered a tax event.
If you hold your shares for a minimum of 3 years in either of your 2 accounts, you will only pay CGT.
You have done the correct thing by separating your investment account from your trading account as now you will only pay income tax as revenue on your trading account. All your gains or losses made after each trade will be a tax event whether you withdraw it or not.
Read through the thread and Im still not sure of some questions.
Questions
Scenario:I buy one batch of shares ,lets say I invest in the INDI 25.Now,2 years later I buy my second batch of the INDI 25.Now,after the 3 year period from the first day I bought my first batch of shares,I want to sell some of them.Will all my shares be clumped together as non CGT tax shares,based on the date of the last purchased shares?
How does this work?Is my whole portfolio clumped together or is each individual share different in the date of their purchase?
Also,which type of tax will I be charged if I invest in different shares at different times,is it based on the last bought shares?
Part 2 as I am still bored.
The occasional sale of a share within the 3 year period does not always make you a Trader in shares. SARS states that "One swallow does not a summer make".
Hi OrcaUnless your domestic worker and gardener helps you pick stocks and you drive to the JSE to Buy and Sell, then by all means, make those deductions.
When you take into account the deductions a trader can make, these can be quite substantial if the trader (as in your case) trades for a living.
These can include:
- internet costs and subscriptions (as mentioned)
- a percentage of your rent, electricity, water, insurance, domestic worker, gardener etc
- depreciation on your computer and other electronic gadgets required for trading
- telephone, cellphone,
- motor running expenses
- wages for your wife or assistant who helps with all the paperwork and research
- bank charges and other sundry expenses
To get real now. SARS will not allow those deductions. Yesterday I filed my tax and the red flag came up because I deducted R2K for internet costs.
If you had traded through a registered company, your losses would have carried over and could have been offset in the subsequent year where there was a gain. Unfortunately as a Sole Proprietor, your loss can't carry foward.
So long as you are REASONABLE and wherever you can legally save why not do it !
Your maid and gardener may not help you trade, but as a business owner operating from home, you are entitled to claim a % of the total home running expenses.
So long as you are REASONABLE and wherever you can legally save why not do it !
Your maid and gardener may not help you trade, but as a business owner operating from home, you are entitled to claim a % of the total home running expenses.
Hi Scitrader. Your totally correct in saying any "home office" expenses incurred in carrying on a trade MAY qualify as a deduction, and certainly if they are genuine and have been incurred in the production of business income, they can be deducted.
However are you aware that any portion of your home utilized for business purposes (I.e. The % referred to above) will then be excluded from the "primary residence" exclusion when you sell the property (and thus be subject to CGT)?
Generally I find that in many cases, taxpayers are too aggressive in attempting to claim home office expenses, without understanding the implications. My all time favourate was a taxpayer wanting to claim a percentage of his estimated dog food expenditure - apparently it was a security cost.
As long as you keep records of purchses and sales. Keep a file for each tax year. Calculate the average base cost (use the Due By You as it includes the costs) and keep it as Open Stock in the first page of your file.
Most important is for you to keep track of the date and cost of your shares.
Once any share in your portfolio reaches 3 years and 1 day old SARS is obliged to treat it as CGT if you sell any portion of it.
I hear what you are saying gcr. My broker sends me a yearly summary for tax purposes that is quite adequate for working out my tax. My job is to see to the Base Cost. This I do and print out the Contract Note and file it.
When you stop "trading" your stocks and Change your Intention to Investing, you have to deem your stocks as 'sold" and pay the tax at market value whether you sold or not.
I fortunately sold off my whole portfolio before some bad news and bought back in afterwards. Since then, I have not sold or added to them and consider them as Investment Stocks since then. I now have just over a year to go for the 3 year thingy to Upgrade to CGT.
Post getting too long for attention span. Part 2 coming.
Orca is the man for tax, Mr Bond aswell (I think). The first R30 000 is tax free, thus you only pay tax on profits above R30,000 profit. Unless of course they change it.
Orca is the man for tax, Mr Bond aswell (I think). The first R30 000 is tax free, thus you only pay tax on profits above R30,000 profit. Unless of course they change it.
If I hold the share of 5 companies and sell them all, is the first R30 000 tax free per company or cumulative?
I thought that the R30 000 exclusion was for normal income tax,oops.Also,am I correct in assuming that all the transaction costs in a trade is included in the sell and buy price for tax purposes?Yes, transaction fees (brokers fee, strate costs etc.) are included in base cost and proceeds.
Guys these are just things that pop into my head.
I trade shares via Standard Bank. When dividends are payed out, it is payed out to my trading account. I then immediately buy more shares with it. The share statement will reflect that I received dividends, but in reality I did not take the money to use for day-to-day living. Must I still declare it as income for tax purposes?
Your divvie is taxed before it gets paid to you.
ORCA, dem, that really is a mouthful! Thanks, but I'm still a bit lost.
1. In a nutshell, are you saying that as a man that works for a salary, I would deduct all costs for having the shares from my total profit, then if the 3 year rule applies, deduct a total of R30 000 from my total remaining profit and then what ever is left, I add 33.3 % of that to my income statement for tax purposes?
2. What if my tax rate is 40% or is the most you will pay 33.3%?
3. I'm not sure if this was clearly answered - The R30 000 - If I have shares in 10 companies and sell them all in one go, after holding for 3 years, is the R30 000 on the profit per company or on all the companies profit combined?
Nope.
And another question - Is there any benefit what so ever if you sell shares after retirement, after turning 60? This is your "pension" or part of your pension.
Orca, that 33.3 % you mention is it still the same percentage if you sell all your shares after turning 60 (retirement)?33.3% is the cgt rate applied to your gains. Your effective rate depends on your marginal tax rate eg. @ 40% marginal tax rate, you would effectively pay 13.3%. At a lower marginal rate you would pay less, eg. 9.99% @ 30% marginal tax rate.
Nope.
And another question - Is there any benefit what so ever if you sell shares after retirement, after turning 60? This is your "pension" or part of your pension.Orca, that 33.3 % you mention is it still the same percentage if you sell all your shares after turning 60 (retirement)?33.3% is the cgt rate applied to your gains. Your effective rate depends on your marginal tax rate eg. @ 40% marginal tax rate, you would effectively pay 13.3%. At a lower marginal rate you would pay less, eg. 9.99% @ 30% marginal tax rate.
In my case, I had 2 trading businesses. One was a coffee shop and the other was stock trading as I had not held the stocks for 3 years yet.
So this means that I had 2 incomes and the profits from both must be combined.
A loss from one can be deducted from the gain of the other.
My case is likely to be the same as yours as most DTT's are standard. I will pay normal tax on the sale of shares in SA to SARS and get Credit for this in Portugal. As Portuguese tax is a bit higher, I will pay some tax in Portugal.Orca - I and I am sure a number of other people would be most interested in once you have set yourself up in Portugal as to what the real tax implications really are, whether you do end up paying double tax etc. I am sure that you will also look at the European or even London markets and dabble a bit in shares when resident in Portugal, so I would hope that you will continue to post once you have left these shores
Once my shares are held for 3 years, then as a non resident in SA, I will pay no CGT in SA but will pay it in Portugal.
Non residents do not pay dividend tax in SA but are liable to pay it in the country of residency.
So whether you paid here makes little diffs as you would have paid it there.
Thank you .That is informative.Orca covered this aspect. Let me know if you need more detail.
Could you or anyone else please paraphrase point 4,especially the second half of it?I'm unclear on it.
Secondly,I am a non-resident,which means that I do not have to pay CGT in S.A.What would happen if after a few years I have to be classified as a resident in SARS eyes?Will I have to pay back that CGT I hadn't paid in previous years?
Or must this CGT tax be paid in the country of residence?
2-I am not emigrating.I am just a non-resident.Am I correct in assuming that as a non-resident I do not have to submit anything except change my adress?
I would recommend you to officially emigrate as it is tax effective. No divi tax and no tax on interest.
1-I am not maintaining a household in S.A.I do not see myself returning to S.A in the near future,for at least 5 years if at all.I do see S.A as my home,but I don't specifically have any intention of going back unless I have to.
2-I have been out of the country for 3 years and have not returned since.I may return to visit people for s short period of time but I plan to stay out of country for the foreseeable future.
Delusion and I will have assets in SA in the form of shares on the JSE. As my wife and I have formally emigrated, we cease to be residents and will pay no tax on divies and our interest earned will also not be taxed.
Delusion on the other hand, has not formally emigrated and will have to pay the witholding tax on all his divies and normal tax on his interest if over the limit here as normal.
Thanks XXXX. Got confused with divies and CGT. I have non property stocks and I presume Delusional also.
Yip also have small amount bought at R1, thus you cannot show loss till they announce next year what is happening. Say you add as loss now (which u cannot) and then next year the share (good bank / bad bank / ugly bank) and you get share back - say R20 a share :LHST: - no say you get rights to buy share in good bank, but you can sell your rights for say R20.00 a right, no :LHST:, say 8c. then you have not made a 100% loss.
What did you buy it at.
If things stay as it is now up until 28 February, I would claim the loss down to the 31c at which the shares were suspended. There clearly is a case to be made for this being a "realised" loss, only being prevented by reason of the suspension. Whatever the eventual value is that can be realised some time in the future, must then be calculated with the 31c as basis. I advise you to do this and see how SARS react. If they allow, :D ;D :TU:, if not, you are not worse off. Don't make an issue of it, just do it on the schedule that you lodge together with your return.
Ouch, maybe in future try and stick to a stoploss, I know it is not easy. Lots of companies are also in ABL, i.e. coronation. I think if you bought under R8, there might be small change that u can recover a bit. If u claim now and say u get something back in Feb, how will u treat it then, maybe wait till then. And claim next year. The bank is operating, and if Feb the offer to shareholders is dismall all will climb out and it will fold, thus the offer will need to be kinda ok. But yes good luck, I feel for u, will drink 2 Rennies and a play on your behalf now.
I will still try to claim the loss for this tax year if possible. If it so happen that the worth goes beyond the 31c in future, then ride the 3 year time out and make a capital profit.
Not skelm. Fully compliant with the letter of the law
Not skelm. Fully compliant with the letter of the law
Umm.... Not actually......
Hi, I think it must have been a dream. I'm also not too sure why you would want to do it (will elaborate on that later). Whether you are a "trader" or a "investor", any loss would be effectively be (depending on your status and tax situation) deductable immediately or carried forward to deduct against future profits (or gains).
As a example, should your share sales be regarded as a "investor" and subject to capital gains. The the following principle will apply. Any capital losses will first be set off against any capital gains earned in the tax year, and if after setting off capital gains, any (net) capital losses remains, they will be carried forward to your next year of assessments to be set off future capital gains. Ringfencing provisions may modify the above principle, but the basic principle would normally be valid for share sales.
If you're a trader, broadly the same principles apply, but depending on your own individual situation, trading loss may be set off against other taxable income (e.g. salary income) prior to being carried off. Again, there may be specific ringfencing provisions that may limit your ability to set off against taxable income.
Note, that your suggestion achieves the same result, to the extent the replacement share is sold. i.e, the benefit of the loss is only received when the replacement share is (eventually) sold.
Hope that all makes sense.
Can an assessed loss – as opposed to an assessed capital loss - be set off against a taxable capital gain?
Yes. Some commentators have questioned this point because a taxable capital gain is included in taxable income. The definition of the term “taxable income” in section 1 provides as follows:
“taxable income” means the aggregate of—
(a) the amount remaining after deducting from the income of any person all the amounts allowed under Part I of Chapter II to be deducted from or set off against such income; and
(b) all amounts to be included or deemed to be included in the taxable income of any person in terms of this Act;
It is evident from this definition that taxable income can be a negative figure. Paragraph (a) would become negative when the amounts allowed under Part I of Chapter II exceed the income of a person. Furthermore, Part I of Chapter II includes section 20 which deals with assessed losses.
The intention of the legislature can also be seen from the amendments to section 103(2) which provides that a ‘tainted’ capital gain cannot be set off against an assessed loss. These amendments would not have been necessary if a taxable capital gain could not be set off against an assessed loss.
Thanks Orca :TU:No problem. Please see the Note I edited in now. I am forgetful so need to keep it for prosperity.
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.What was the outcome here Orca? I'm guessing by the fact that you're still abroad that you paid only CGT?
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.
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
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...