A minor can in fact be registered as a taxpayer in South Africa. This is in terms of section 67(1) of the Income Tax Act that "every person who at any time becomes liable for any normal tax or who becomes liable to submit any return contemplated in section 66 must apply to the Commissioner to be registered as a taxpayer in accordance with Chapter 3 of the Tax Administration Act.” If the minor therefore becomes liable to submit a return or becomes liable for any normal tax, the minor must be registered as a taxpayer. Section 68. Income and capital gain of married persons and minor children.—(1) Any-- (a) income received by or accrued to or in favour of any person married in or out of community of property which in terms of section 7 (2) is deemed to be income received by or accrued to such person’s spouse; or (b) capital gain which is in terms of paragraph 68 of the Eighth Schedule taken into account in the determination of the aggregate capital gain or aggregate capital loss of such person’s spouse, shall be included by such spouse in returns of income required to be rendered by that spouse under this Act. (2) In the event of the death of any person during any year in respect of which such income is chargeable or in which such capital gain is taken into account, the income or capital gain of such person’s spouse for the period elapsing between the date of such death and the last day of the year of assessment shall be returned as the separate income of such spouse. (3) (a) Every parent shall be required to include in his return-- (i) any income received by or accrued to or in favour of any of that parent’s minor children either directly or indirectly from that parent; or (ii) any capital gain or capital loss in respect of any transaction entered into directly or indirectly by that parent, which is taken into account in the determination of the aggregate capital gain or aggregate capital loss of any of that parent’s minor children, together with such particulars as may be required by the Commissioner. (b) Every parent shall be required to include in that parent’s return any income deemed to be that parent’s income in terms of subsection (3) or (4) of section 7 or any capital gain deemed to be that parent’s capital gain in terms of paragraph 69 of the Eighth Schedule. Income of Minor children A taxpayer is liable for the payment of tax on any income which has been received by or accrued to or in favour of any minor children if such income arises from a donation, settlement, or other disposition by – (i) the taxpayer; or (ii) any other person, if the taxpayer made a donation, settlement or gave some consideration directly or indirectly in favour of the other person or his family. A minor child will, however, be liable for tax on income which is received or accrues to him/her independently of him/herself; in his own right, for example, bona fide salary and investment income derived from his/her own funds i.e. from money inherited by him/her or received as a gift from any person other than the person mentioned in (i) and (ii) above or from any other source. Should a minor child’s taxable income be sufficient to render him/her liable for tax, the taxpayer, as the legal guardian, must register him/her for income tax purposes and obtain and submit a return on his/her behalf. All investment income received by or accrued to a taxpayer or his/her minor children must be declared (including investment income which has not been paid but has been utilised, accumulated or re-invested for the taxpayer or his/her minor children’s benefit). Where interest is claimed as a deduction against investment income received, full particulars (i.e. amounts invested/borrowed, interest rates, date of each loan and investment) must retained for a period of five years after submission of the return. Courtesy of: Fedgroup
0 Comments
Around January and February of every year, we would like to remind you to consider topping up your retirement annuity fund and tax-free investment.
According to the current legislation, you may contribute up to 27.5% of your taxable income to a retirement annuity fund and enjoy tax deductions, subject to a limit of R350,000. As the 28th February is the end of the tax year, you must calculate and pay the additional amount to your retirement annuity prior to this date, in order to qualify for tax deductions and tax refunds. Here is an example: Ms Rama has a monthly salary of R80,000. In December she received a bonus of R100,000. Every month she contributes R5,000 to a personal retirement annuity fund. Her annual income is then R1,060,000. The maximum tax-deductible contribution to retirement annuity is R291,500. Over the year she has contributed R60,000 to her retirement annuity fund, so the additional amount she may top up in her RA is R231,500 Tax-Free Savings Account You may contribute up to R36,000 to a tax-free savings account in a tax year. You must calculate how much you have contributed so far since 1 March last year and pay the additional amount to your tax-free savings account prior to the 28th of February, in order to make use of current tax year's allowance. You can also start a tax-free investment in the name of your children. Contact us today to top up your retirement annuity or tax-free investment - email service@daberistic.com As you are aware, the tax filing season for individual non-provisional taxpayers has started 1 July 2022. We would like to remind you to submit your tax return in good time. According to SARS official media release: - over 3 million taxpayers, have been auto-assessed by SARS and will not have to file a tax return if they are satisfied with the outcome. - Non-Provisional taxpayers who did not get an auto-assessment and who are required to file a return can do so from 1 July 2022 up until 24 Oct 2022. - Provisional taxpayers as well as Trust submissions can start with filing a return from 1 July 2022 until 23 January 2023. Click the links below for SARS announcements: https://www.sars.gov.za/media-... Filing Season 2022 for Individuals is now open Our resident tax practitioners' feedback is that many of the auto assessments received by our clients require corrections and adjustments, so don't just simply accept SARS' assessment. Review it and consult a tax practitioner if you need help. Tax Certificates By now you should have received tax certificates from financial institutions in the months of May and June to assist with your tax filing. These include tax certificates from the medical aid, banks, life insurance companies and investment companies. Check your email inbox and junk folder, search for the keyword "tax certificate" to find relevant emails. Download the attached tax certificates in a folder on your local drive or cloud storage for tax filing. Discovery Health: The email from Discovery Health looks like the following: You may ask Discovery to redeliver your tax certificates and tax summaries through their WhatsApp service on your smartphone: Ask Discovery WhatsApp Service You can access your communication in the secure inbox available through www.discovery.co.za and the mobile app. Allan Gray Investment The email from Allan Gray looks like the following: To view and download your tax certificates, log into your secure online account https://www.allangray.co.za, then navigate to Reports >> Tax certificates once you've logged in.
If you have difficulties downloading your tax certificates, or require the service of a tax practitioner, email to service@daberistic.com and our team will gladly assist you. Help South Africa - Do your tax filing Finance Minister Tito Mboweni gave his budget speech on 24 February. Overall it is a taxpayer and investor friendly budget. Old Mutual has a nice summary of tax changes, we share with readers below. Here’s what you need to know about your IT3B and IT3C certificates: The IT3B certificate is all about the income you’ve generated from your investment. It’s going to reflect: Local dividends: this is the amount which has been paid to you in dividends from JSE listed companies in the last tax year. We automatically pay 20% dividend withholding tax on these for you, so this appears on your certificate to let SARS know that it’s done and dusted. Make sure you disclose this on your tax return and that’s it - finished and klaar. Foreign dividends: this represents any dividends you received from JSE listed companies which earn money overseas. We’ve paid the 15% dividend withholding tax on your behalf, but you still need to disclose this on your tax return. Taxable dividends: This represents REIT (Real Estate Investment Trust) distribution and applies to those of you who hold shares in a company that invests in property. Interest: This amount of interest, which you earn on local and foreign investments, is considered as income and you'll need to declare it to SARS. Bank Accounts Interest: This is the interest you earn on your bank accounts and deposit accounts. Any interest you earn in a year over R23 800 (R34 500 if older than 65) is taxable when you submit your tax return. The IT3C certificate is all about capital gains. How much did your investment grow? Did you sell anything? Did you earn any profit by doing so? You’re only taxed on shares or unit trusts that you sell. Your IT3C certificate is going to show: A list of companies or unit trusts you’ve invested in; How many shares/units you have in each and how much you bought them for. Because you can buy shares for a certain price on one day, and then buy more of the same shares on another day when the price is different, the cost per share is going to be shown as an average of those prices – to keep things simple! So if you bought 1 share at R50 on Monday and another at R100 on Wednesday, you’d have two shares which you paid R150 in total for. Even though they were bought at different prices, the average cost per share is going to be: R150 divided by 2 shares = R75.00 per share. If you’ve sold a share at a higher price than when you bought it, you’ve made yourself some dosh haven’t you? SARS is going to want in on that. ‘Proceeds’ is going to reflect the amount you sold your shares at and ‘Profit/loss’ is going to reflect how much money you made or lost in that sale. The good news is that SARS is only interested in this amount if it is greater than R40 000 – that’s when you’ll start getting taxed on it. Adapted from: Easy Equities Around this time of the year, we would like to remind you to consider topping up your retirement annuity fund and tax-free investment. Retirement Annuity According to the current legislation, you may contribute up to 27.5% of your taxable income (strictly speaking, non-retirement funding income) to a retirement annuity fund and enjoy tax deductions. As 28 February is the end of the tax year, you must calculate and pay the additional amount to your retirement annuity prior to this date, in order to qualify for tax deductions and tax refunds. Below is an example of topping up your retirement annuity: Ms Rama has a monthly salary of R80,000. In December she received a bonus of R100,000. Every month she contributes R5,000 to a personal retirement annuity fund. Her annual income is then R80,000*12 + R100,000 = R1,060,000. The maximum tax-deductible contribution to retirement annuity is R1,060,000 * 27.5% = R291,500. Over the year she has contributed the following to a retirement annuity fund: R5,000 * 12 = R60,000 The additional amount she may top up in his retirement annuity (RA) is R291,500 Less R60,000 = R231,500 Tax-free investment You may contribute up to R36,000 to a tax-free savings account in a tax year. You must calculate how much you have contributed so far since 1 March 2020 and pay the additional amount to your tax-free savings account prior to 28 February, in order to make use of current tax year's allowance. You can also start a tax-free investment in the name of your children. To top up your retirement annuity or tax-free investment, please contact service@daberistic.com Allan Gray has provided an excellent summary of the 2019 budget speech. We would like to share with you here: What were the key changes? |
AuthorKevin Yeh Archives
January 2025
Categories
All
|