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The tax implications of retirement

When can I retire from a retirement fund? You can claim the retirement benefits from a retirement fund once you have reached the age of 55 or you are permanently disabled or you emigrate (subject to terms and conditions). How do I receive funds from the retirement fund when I retire? When you retire, a […]

The tax implications of withdrawing from a retirement fund

Withdrawal benefits are paid to workers who leave work either through dismissal or resignation before they’re due to retire. Usually, if a worker resigns and withdraws from a pension fund, they’re entitled to a payout of both employer and employee contributions made to the fund during the full term of their service, plus investment growth on those contributions. […]

Long Service Awards to Employees

Employers may grant a tax-free long service award (in cash or as a gift of an item/voucher) to an employee to a maximum value of R5,000. Any amount or value over the R5,000 is subject to income tax. For an award to qualify as a long service award, the asset must have been given by […]

New rules for income tax on foreign employment income

Currently South African residents who earn employment income and are out of the country for 183 days or more of a tax year are not regarded as South African residents for income tax purposes and are not taxed in South Africa for that tax year. Treasury is of the view that this foreign employment tax […]

Tax-Free Savings and Investment Accounts

In terms of a Tax-Free Savings and Investment Account (TFSA), you are entitled to invest up to R33,000 per year and your contributions are capped at a lifetime limit of R500,000. TFSA’s were launched in the March 2015 by an amendment to the Income Tax Act. You pay no tax on any interest income or […]

Donations Tax explained

When you give an asset away for no value, this would be considered a donation. Furthermore, if you sell an asset for less than its actual open market value, the difference between the price paid and the price that should have been paid will also be considered a donation. SARS determine when the price paid […]

SARS is allowed to take money from your bank account

If you have outstanding tax debt, the SA Revenue Service (SARS) has the power to reach into your bank account and take the outstanding funds by instructing your bank, as its agent, to allow it access – sometimes even without notifying you. In fact, the Tax Administration Act provides that SARS may notify any third […]

Medical Expenses You Can Claim Back from Income Tax

Medical expenses can be claimed back from tax through a tax credit. A tax credit is a non-refundable rebate. This means that a portion of your qualifying expenses, in this case medical related spend, is converted to a tax credit, which is deducted from your overall tax liability (the amount of tax you have to […]

Capital Gains Tax explained

Capital gains tax (CGT) is not a separate tax but forms part of income tax. CGT is basically a tax on the resale of assets. Anyone who disposes of or sells assets is liable for CGT. The tax also arises following the death of an asset owner. When submitting your annual income tax return, any […]

Home office expenses claimable for income tax purposes

Home office expenses Self-employed individuals and employees who often work from home may be able to reduce their taxable income by claiming some home office expenses. SA Revenue Service (SARS) has set out specific conditions in order for individuals to qualify for home office deductions. These are If more than 50% of your income comes […]