Search:  
Gauteng Business News
3522
VIEWS

Send  Share  RSS  Twitter  09 Jul 2009

Finance: SARS Creates a Tax Window for South Africans

 





Recent Gauteng Business News

If the amendments in the draft Amendment Bill issued on 4 June come into force, middle income individuals selling a residence for R3 million will save hundreds of thousands of Rands upon sale and high net worth individuals who are selling more opulent homes valued at R20 million or more will save nearly R2 million upon sale.

“The opportunity is real and there are no catches if the individual is advised by a professional,” says Kemp Munnik , Director of the Tax Services Division of top five audit firm BDO. “But if South African homeowners are as slack as they were in October 2001 when Capital Gains Tax was first introduced and a limited window period was granted, they will lose out on this opportunity,” he says.

Munnik says that houses bought by middle income individuals were often unconsciously bought in a company. “The house had been placed in a company or cc, and was acquired as such. While it was a good idea at the time, the recent property boom has seen the value of houses increase exponentially.

A house bought for R1 million several years ago may very realistically be sold for R3 million today. If it is held in a company it will attract tax on the R2 million profit made. It will also attract Capital Gains Tax at 14% and Secondary Tax on Companies at 10%. The combination of these taxes will strip the owner of more than R436 000. If the same house were held privately, the taxable amount would be R50 000.

“By contrast a significant number of high net worth individuals consciously established companies or ccs through which to acquire their home. They were advised that they would benefit hugely from it. However a house bought for R5 million, placed in a company structure, and sold today for R20 million will attract a whopping R3,3 m in tax. While tax on the sale of the house if it were held personally would be R1,35 million. That’s a saving of nearly R2 million!”


 
 
 
solarportBusiness ProfilesBubble-Chairohse-consultancyperfect-wedding
 
   
 
 
 
  Accomodation
Accommodation


Online Foreign Exchange
Foreign Exchange


Directory
Directory


Fax
Fax 2 Email


Finance
Finance


Furniture
Furniture


Casino
Online Casino


Restaurant
Restaurant


Auctions
Shop Online


Study IT
Study IT Online


Web design
Web Design


Weddings
Weddings


Work
Work from Home
 
 
 
 
 
Company News
 
 

 

© 2017 www.gbn.co.za. All rights reserved.

Daily Newsletter Subscription

 

Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Name:
Email Address: