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Income Tax

Property Investment and Related Taxes

There are several taxes that you need to be familiar with if you invest or trade in fixed property. Income Tax The seller will pay Income Tax on the sale of property which was bought (and perhaps renovated) with the object of selling at a profit. The taxable income will be added on top of any other taxable income earned by the seller before calculating the total tax (at 28% for companies and up to 45% for individuals). Capital Gains Tax (CGT) The seller will pay CGT on the sale of property which was bought (and perhaps renovated) with the…

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The new income and dividends tax rates introduced in the 2017 Budget

In his 2017 budget speech, Pravin Gordhan announced the “supertax” rate of 45% on individuals’ taxable income in excess of R1,5m per annum. This tax rate also applies to all taxable income earned by a trust (except a special trust). Should we be concerned? He also announced that Dividends Withholding Tax is increased from 15% to 20%. Again, should we be concerned? It all depends upon how you have structured your affairs. Let’s take Income Tax on trusts first. The effect of the change is that CGT on trusts also increases from 32.8% to 36%. None of this should matter to…

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