Author Peter Surtees (Norton Rose) On 13 June 2013 the Cape tax court delivered judgment on a capital/revenue case, which resulted in a partial victory for both sides. The taxpayer was a company whose sole purpose was to hold a parcel of shares. The question in issue was whether, when the company sold the parcel, the gain was capital or revenue in nature. As was to be expected, in arriving at its decision the court had to determine the intention of the company in holding and then disposing of the shares, and to do this it had to establish the intentions of
Category: Capital Gains Tax
A Departure From ‘Adequate Reasons’ and Common Sense
Author: Daniel Areias & Johan Kotze (Bowman Gilfillan) All taxation , in one way or another, may impact upon fundamental human rights. However, to ensure that the imposition is not absolute, section 5 of the Promotion of Administrative Justice Act provides that every person, whose rights may have been materially and adversely affected by administrative action, may request written reasons for that action from the administrator responsible.
Anomalies in new REIT regime could result in unforeseen tax implications
Property companies urged to get familiar with legislation before making the move to list. The Real Estate Investment Trust (REIT) regime is set to usher in a new era for the listed property sector by affording certain tax advantages to qualifying entities and providing certainty in respect of the
Primary Residence Exclusion
Is it true that globally mobile employees can sell their homes and not pay capital gains tax even if they rented it out for a number of years? It is true in most cases. The general rule is that when you sell your home, the capital gain realised on the sale is excluded from capital gains tax up to a limit. Based on the Income Tax Act No. 58 of 1962 (the Act), you will pay no capital gains tax on the first R2,000,000 you make when you sell your home. There are, however, some restrictions on this exclusion.
Anomalies in new REIT regime could result in unforeseen tax implications
Property companies urged to get familiar with legislation before making the move to list. The Real Estate Investment Trust (REIT) regime is set to usher in a new era for the listed property sector by affording certain tax advantages to qualifying entities and providing certainty in respect of the tax treatment of property loan stock companies. However, as the legislation is new and untested, uncertainties and anomalies ex
Year in Review – 2012 Tax Developments in South Africa
During 2012 a number of significant amendments were made to the tax legislation in South Africa. This report provides a brief description of certain of these amendments which may be of interest to foreign companies that conduct business in South Africa as well as those seeking investment opportunities in South Africa.
Meaning of primary residence
The term ‘primary residence’ is defined in paragraph 44 of the Eighth Schedule to the Income Tax Act No. 58 of 1961 (the Act). The reason this definition has captured the minds of many is due to the exclusion on the gain or loss made on disposal of one’s primary residence,
Trusts – is the conduit principle in peril?
The announcement regarding trusts in the 2013 budget is notable for two reasons: its brevity and its lack of detail. Any comments made in advance of the publication of the first draft of the Taxation Laws Amendment Bill expected in June can therefore only be speculative.
Capital gains tax and the primary residence exemption
Is it true that globally mobile employees can sell their homes and not pay capital gains tax even if they rented it out for a number of years? It is true in most cases. The general rule is that when you sell your home, the capital gain realised on the sale is exempt from capital gains tax. Based on the Income Tax Act, No 58 of 1962, you will pay no capital gains tax on the first R2,000,000 you make when you sell your home. There are, however, some restrictions on this exemption.
SARS and your bank account
On 29 February 2012, the South African Revenue Service (SARS) issued a notice in Government Gazette No 35090 (Notice No 173) relating to the liability of certain institutions, most notably banks, to furnish SARS with financial information about taxpayers. The notice was issued in terms of s69 of the Income Tax Act, No 58 of 1962, which section has been superseded by s26 of the Tax Administration Act, No 28 of 2011 (TAA).