International Tax – Exit charge CGT – Section 9H

The Taxation Laws Amendment Bill 39 of 2013 (the Bill) was tabled by the Minister of Finance on 24 October 2013. One of the interesting amendments in the Bill to the Income Tax Act 58 of 1962 (the Act) relates to the exit charge on interests in immovable property, especially in light of the recent amendments to the double tax treaty between South Africa and Mauritius, concluded on 17 May 2013.

Capital Gains Tax: Trusts vs Individuals

Author: Rigard Sevenster (Fiduciary Specialist at Glacier by Sanlam.) Many financial planners, and the general public at large, have expressed concern regarding when and to what extent they or their trust is liable for capital gains tax (CGT). Knowing the different tax treatments will assist in choosing how to structure your estate and trust more effectively. In this article we highlight some of the most important differences in CGT from either a trust or an individual’s perspective.

Determining A 'Group Of Companies' For Purposes Of The Corporate Rules

Author: Andrew Lewis (CliffeDekkerHofmeyr) The Income Tax Act, No 58 of 1962 (the Act) contains a definition of a ‘group of companies’ in s1 of the Act. However, a narrower definition of the term ‘group of companies’ is contained in s41 of the Act, which applies to certain corporate tax roll-over rules and other provisions contained in the Act. It is important to identify which companies fall within the different definitions of a ‘group of companies’ in order to determine whether one qualifies for the applicable tax relief.

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

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).

South African tax case considers application of capital gains treaty exemption to deemed disposition

A recent decision of the Supreme Court of Appeal of South Africa considered the application of the capital gains article in a double tax convention based on the OECD model to a deemed disposition of property occurring as a result of an “exit tax” imposed on an emigrating corporation. As the Court’s decision concerns capital gains exemption language that is similar to that used in most double tax treaties based on the OECD Model, it provides a helpful glimpse into how such provisions may be interpreted in other jurisdictions, including Canada.

Conversion of a public company to a private company

The South African Revenue Service (SARS) has released a number of binding class and private rulings of late. One of the interesting rulings is Binding Class Ruling 033 (BCR 33) which deals with the capital gains tax consequences for a public company upon conversion, in terms of the Companies Act, No 71 of 2008, to a private company.