Tax Tips – Did You Know?
by Maritza du Plessis
SARS not only levies tax on income. It is important to know which taxes might apply when buying or selling a house or even when someone passes away: Just to name a few examples:
Transfer duty is a tax levied on the purchase of a house
Q: Who pays the Transfer duty?
A: The Purchaser of the property pays the transfer duty
Q: When is Transfer duty payable?
A: Transfer duty must be paid over to SARS before the transfer duty receipt is issued. The Conveyancer needs the transfer duty receipt is part of the documents that must be lodged at the deeds office for registration to be finalised. If for some reason transfer does not proceed immediately, it is important to note that transfer duty is payable within 6 (SIX) months from date of sale/acquisition to avoid penalties.
CAPITAL GAINS TAX (CGT)
Although Capital gains tax forms part of your income tax, it is important to bear in mind that there might be tax implications if you sell your house.
Q: When is capital gains tax applicable?
A: CGT is levied by SARS if capital gain arises when you dispose of an asset on or after 1 October 2001 for proceeds that exceed its base cost.
Q: What is base cost?
A: Base cost is the amount against which any proceeds upon disposal are compared in order to determine whether a capital gain or loss has been realised.
Q: Will the sale of my primary home be subject to CGT?
A: For the 2013 to 2019 years of assessment the first R2 million of a capital gain or loss on disposal of a primary residence must be disregarded (2007 to 2012: R1,5 million).
Estate duty is levied on the estate of deceased person. There are however some exceptions.
Q: At what rate is Estate duty charged?
A: Estate Duty is charged at the rate of 20% upon the dutiable amount of the estate
Q: When is Estate Duty due?
A: Estate Duty is due within 1 year of date of death or 30 days from date of assessment if assessment is issued within 1 year of date of death. Currently, interest is levied at 6% p.a. on late payments.
Q: Does a Deceased Estate need to lodge a Tax return?
A: The Executor of the Estate has an obligation to make sure that all tax returns of the deceased are up to date with the South African Revenue Services
If you need help withyour tax affairs, use a registered tax practitioner.
Not everyone has to file an income tax return!
You do not need to submit a return if ALL of these apply to you:
• Your total salary for the year before tax is not more than R500 000; and
• You have only one employer; and
• You have no car allowance/ company car/ travel allowance or other income (e.g. interest or rental income); and
• You are not claiming tax-related deductions/rebates (e.g. medical expenses; travel and retirement annuity contributions, other than pension contributions made by your employer)
But you have to submit a return if you worked for more than one employer or retired or resigned from employment, or your circumstances have changed in a substantial way, including letting out rental property.
You also have to submit a return if you wish to claim tax-deductible expenses such as medical scheme contributions and medical expenses not paid by a medical scheme, and retirement annuity fund contributions, etc.