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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.

This carry over of losses from one tax year seems to run until you start making profits on sales out of your portfolio. I am a provisional tax payer and current I have applied losses made in 2008 and 2009 against my profits made over this period - I am now down to about R 50,000 in terms of losses which I can carry forward into the 2015 tax year. However I still hold Alert Steel and they are suspended at present and if they liquidate then I could accrue some R 22,000 in losses if this happens before February 2015

I'm abit unclear on something.I have read the Tax guides .Let me give you a basic scenario.

Tax exclusion is R30 000 for losses or gains from stocks.Since I will have(and will continue to) paid tax on my income separately in the country I work,I presume this will be seperate.

2014- I make a loss of R50 000.
   
Tax exclusion              R30 000
Net loss                      R20 000

2015-I make a net profit  of R50 000 on Stocks(trading),commodities,Forex etc.

Tax exclusion                               R30 000
Net Gain                                      R20 000

1.In 2015 I will have made a tax free profit of R20 000.Is that right?

2.Its only possible to offset that loss to the following year,not any other consecutive year.Is that right?

Ok, it's time for my tax question.

I moved out of RAFIND and into DIVTRX when the market was at it's lowest. Now I'd only held RAFIND for maybe a year, so would that be considered a trading loss rather than a capital loss?

Then following on from that, could I use that to offset a capital gain, for example:
Sell RAFIND for R100k loss after holding for 1 year.
Sell FOORD equity for a R330k gain after holding for 3+ years.

Therefore income loss is R100k, capital gain is R330k. Capital gain has R30k exclusion, then 13.3%, 330-30/3=100, of that is income gain in income gets added to the trading loss and I end up owing 0 tax in those transactions?

Thanks Orca, yeah I want it to be a trading loss, as that means it's worth 3 times as much as a capital loss, but the question is, can I use that to offset the capital gain?

If I can, I can get out of my stupid unit trust pretty much tax free, if not I'll have to cough up more than I'd like.

Not quite correct. Your e filing will ask if you were trading. A page will open where you enter Cost of Sales, Purchases and Sales. If you had Expenses then you can include them in the box as well.

I will post the exact method here today as I don't recall all the details now.

You cannot offset a Capital loss with your income. The loss carries over until you can offset it against future Capital gains.

I suggest you write this down for future reference.
You broker will give you an analysis of your activities for the tax period. Mine is called "Holdings Analysis for year ending 28 Feb 2015" and all the figures are at cost so no expenses such as brokerage, taxes and VAT need be calculated as they are already included.

First you need to work out Cost of Sales. The report will only give you the Opening Stock amount of shares you had at year start. This you have to calculate depending if you used the FIFO or Weighted Ave method. This is at cost or the "Due From You" amounts.

Cost of Sales
Opening Stock
Add: Purchases  (this is the total amount shown in Rands on your report)
Less: Closing stock (this is according to your FIFO or WA method)
Total: Rxxx

Disclosure in SARS efilling.
In Trading section. Number of trades will be 1 even if you traded 100 times. Patrick might have 2
due to his 2 accounts.
1. Sales. (this is the amount shown in the Totals column of the report)
2. Cost of Sales.
3. Deductions. Internet costs, Stationary etc.
4. Source Code. 2514 if it was a gain. A Loss will be 2515

Note: Your Closing Stock will be next year's Open Stock so after you calculated it, write it on the report then you need not calculate your Open Stock next year.

Capital Gains will not be in the Trading Section.



 

Thanks Orca 

No problem. Please see the Note I edited in now. I am forgetful so need to keep it for prosperity.

Very good to hear. Not because I want to trade, but because I plan to live overseas while having website money paid into an SA bank account...