tax Archives

Instead of declaring your drawings as salary, rather fix a monthly salary of, say R40 000, above what your start-up company can afford to pay you right now. Pay the PAYE on that fixed amount and credit the balance to your loan account. Then deduct any drawings from the loan account. When the company can pay you a good salary of, say, R70 000 per month, declare only R40 000 for PAYE purposes and take out the rest as repayments of the loan account. It works like this – How does it work? By paying a consistent amount of…

With times as tough as they are right now, several clients have had to approach SARS to see if they can get their tax liability reduced.
Whether it is Income Tax, VAT or PAYE that is owing, SARS will look at the taxpayer’s ability (or not) to pay, and will come to whatever arrangement gives SARS the best achievable result. In other words, they would rather have half a loaf than no bread at all.

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…

So you are getting married. Congratulations! What are the essential things you need to know relating to tax, estate planning and asset protection? The first thing to consider is the nature of your marriage. There are a number of options – 1) A traditional marriage. In law this is a marriage in community of property. 2) Community of Property. The effect of this marriage is that the two separate estates (wealth) merge into one which is the shared property of both parties. On dissolution of the marriage, the two parties have equal claim to their joint estate and have to…

I am often surprised to find how little our clients understand their company’s tax and CIPC obligations, so here’s a brief explanation – The terms company and Close Corporation are synonymous in the discussion below. 1) All companies must be registered as tax payers. 2) They are all provisional tax payers and that means they must submit three tax returns each tax year regardless of whether they have traded or not. 3) The 1st provisional tax return is due 6 months after the beginning of the relevant tax year (end August 2016 for a February year end company). This is…

There are massive benefits in having your company or CC classified as a Small Business Corporation – most particularly a potential tax saving of approximately R95,000 every year. Here is how you qualify – 1) All members (shareholders) must be natural persons (i.e. no trusts or other companies). 2) No members may hold shares in any other private companies except dormant companies with less than R5 000 assets. 3) Turnover of the company and its subsidiaries must not exceed R20m. 4) No more than 20% of the turnover and capital gains may consist of investment income (such as property rental) and…

There are three ways of moving assets into a trust and they all have different tax consequences Donation Many people think that this is what they need to do. Problem is you’re only allowed to donate R100 000 total per annum. After that you have to pay 20% Donations Tax so this is not the way to go. Sale This is the normal way. You sell the asset to the trust, or usually a company owned by the trust (the sale price is deemed to be at market value for tax purposes) and take the tax consequences which are usually…

There are plenty more, but here are the most obvious top ten – First, the Do’s 1. Engage an independent professional (accountant or attorney) as one of the trustees. Otherwise you risk breaking down the firewall between your creditors and the trust assets. 2. Ensure that you are one of…

tax

How a new company can save PAYE

Is a compromise with SARS taxable?

Property Investment and Related Taxes

I am getting married. What should I know about tax and finance?

How Company Tax Returns and CIPC Returns Work

The benefits of being a Small Business Corporation

How to move assets into a trust

4 do’s and 6 don’ts with your family trust