Nwanda internal news

1. New Home of Nwanda:

Please note that we have moved to our new premises located at 28a Riley Road, Bedfordview.  Maps available:

  1. Map from our previous premises (Kirkby Road);
  2. Map from Edenvale Offramp;
  3. Map from Van Buuren Offramp.

2. Office closure:

We wish to notify our clients that our offices will be closed from 22 December 2014 and will re-open on 5 January 2015.

3. Wedding Bells

Congratulations to Erika van Eck and Christopher Botha, who were married on 25 October 2014.

Erika van Eck and Christopher Botha

4. Examinations: UNDER GRADUATES:

1
To all our Trainees writing their second semester exams, you will be missed during October & November. As always, make us proud.

 

 

5. Employees on the move:

Christopher Botha will be moving on.  We wish him the best in his future endeavors.

Capital Gains Tax and the sale of a property

Capital Gains Tax was introduced on 1 October 2001. Capital Gains Tax is payable on the profit a seller makes when disposing of his property.

What is meant by Capital Gain?

A person’s capital gain on an asset disposed of is the amount by which the proceeds exceed the base cost of that asset.

What is base cost?

The base cost of an asset is what you paid for it, plus the expenditure. The following can be included in calculating the base cost:

  1. The costs of acquiring the property, including the purchase price, transfer costs, transfer duty and professional fees e.g. attorney’s fees and fees paid to a surveyor and auctioneer.
  2. The cost of improvements, alterations and renovations which can be proved by invoices and/or receipts.
  3. The cost of disposing of the property, e.g. advertising costs, cost of obtaining a valuation for capital gains purposes, and estate agents’ commission.

How was base cost of assets held calculated before 1 October 2001?

If the property was acquired before 1 October 2001 you may use one of the following methods to value the property:

  1. 20% x (proceeds less expenditure incurred on or after 1 October 2001).
  2. The market value of the asset as at 1 October 2001, which valuation must have been obtained before 30 September 2004.
  3. Time-apportionment  base cost method. Original cost + (proceeds – original cost) x number of years held before 1 October 2001 divided by the number of years held before 1 October 2001 + number of years held after 1 October 2001).

How is Capital Gains Tax paid?

Capital Gains Tax is not a separate tax from income tax. Part of a person’s capital gain is included in his taxable income. It is then subject to normal tax. A portion of the total of the taxpayer’s capital gain less capital losses for the year is included in the taxpayer’s taxable income and taxed in terms of normal tax tables.

How is Capital Gain calculated?

If you are an individual, the first R30 000 of your total capital gain will be disregarded. Then 33.3% of the capital gain made on disposal of the property must be included in the taxable income for the year of assessment in which the property is sold. When the property is owned by a company, a close corporation or an ordinary trust, 66.6% of the capital gain must be included in their taxable income.

Primary residence and Capital Gains Tax

As from 1 March 2012 the first R2 million of any capital gain on the sale of a primary residence is exempted from Capital Gains Tax. This exemption only applies where the property is registered in the name of an individual or in the name of a special trust. The property should furthermore not exceed 2 hectares. If the property is used partially for residential and partially for business purposes, an apportionment must be done.

If more than one person holds an interest in a primary residence, the exclusion will be in proportion to the interest held by each party. For example, if you and your spouse have an equal interest in the primary residence, you will each qualify for a primary residence exclusion of R1 million. You will also be entitled to the annual exclusion, currently R30 000.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

SARS: Procedure to change banking details for Personal Income Tax (Individuals)

SARS is responsible for protecting taxpayers against unauthorised changes to their personal details. Taxpayers wishing to register or change their banking details must visit a SARS branch in person and present the documentation required for verification before SARS will process any changes to their banking details.

Requirements for different types of bank accounts

1. Own bank account:

  • The account holder must visit a SARS branch in person with the documentation set out in point 1, 2 and 3 below.

2. Joint bank account:

  • Both account holders must visit a SARS branch and each of them must take with them the documentation set out in point 1, 2 and 3 below.
  • SARS will verify both account holders’ details before registering or changing banking details.

3. Third party bank account:

  • The main account holder must visit a SARS branch in person and take with him/her the documentation set out in point 1, 2 and 3 below.
  • If a refund is due to the taxpayer who is the third party, he/she will have to open their own bank account. SARS will not pay the refund into the account of the main account holder.

Can I send someone else to  the SARS branch on my behalf if I give them power of attorney?

No. The taxpayer must still visit a SARS branch in person to register or verify his/her banking details except for certain exceptional circumstances set out in the following paragraph.

The exceptional circumstances where SARS will allow registration and verification of banking details by someone else than the taxpayer, provided that the other person has power of attorney, are when the taxpayer is:

1. An estate due to death or sequestration

2. Incapacitated or terminally ill

3. A non-resident (emigrant/expatriate/foreigner/temporarily outside South Africa)

4. In jail

5. Under 18 years of age

Documentation required for verification of banking details

1. Proof of identity:

Original and valid ID document/Passport/Driver’s Licence/Asylum Seeker’s Permit plus one certified copy thereof

2. Proof of banking details:

2.1 Copy of bank statement with original bank stamp or ABSA eStamped statement

  • Not more than three months old
  • Must confirm account holder’s details:
    1. Legal name of account holder
    2. Account number
    3. Account type
    4. Branch code

or

2.2 Taxpayer opened a new bank account but have not received a bank statement yet

  • Original letter stamped by bank on bank’s letterhead confirming:
    1. Legal name of account holder
    2. Account number
    3. Account type
    4. Branch code
    5. Date on which bank account was opened

3. Proof of residential address:

Copy of any one of the documents listed below.

3.1 Document not older than three months:

  1. Municipal account
  2. Student fee account
  3. Co-op statement (farmers)
  4. Medical aid statement
  5. Telephone account
  6. Court order
  7. Subpoena
  8. Traffic fine
  9. Documents relating to UIF or pension payout

3.2 Document not older than six months:

  1. Mortgage statement from mortgage lender

3.3 Document not older than 12 months:

  1. Motor vehicle licence documents
  2. Life assurance document
  3. Short-term insurance document
  4. Health insurance document
  5. Funeral policy document
  6. Statement from share, portfolio or unit trust investment
  7. Current and valid lease/franchise agreement

3.4 If none of the above documentation is applicable/available, the taxpayer must complete and submit Form CRA01.

  1. If proof of residence is in the name of a third party, the taxpayer must submit together with CRA01 a certified copy of the ID document/temporary ID/passport/driver’s licence of the third party.

Tips

  • Make sure you have all the required documentation when you go to SARS otherwise SARS will not update your banking details. You will need to get all the documentation together and go to a  SARS branch again.
  • Make sure that the following stamps appear on all certified copies of documents:
    • “True Copy”
    • Commissioner of Oaths
  • Ensure that copies are certified by a person authorised to do so, for example SAPS/SAPO/attorneys.
  • SARS does not permit credit card/mortgage/foreign bank accounts for refund purposes.

SARS is taking their responsibility to protect taxpayers’ banking details seriously. Despite the inconvenience, it is to the taxpayer’s benefit to confirm their banking details with SARS to ensure that the taxpayer entitled to the refund will actually be the person to receive the refund.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

References:

  • IT-ACM-06-G01 – Change of Banking Details for Personal Income Tax – External Guide
  • GEN-BR002 – Changing Your Banking Details – External Brochure

Ten tips for small business owners during tough financial times

When the economy is slow, small business owners struggle to survive, many for the first time. Financial problems consume valuable time and business resources, yet must be dealt with proactively. Use the resources your banker provides; he has the expertise and cares about your business and its financial well-being. Once you have read these tips and you think you need help, call your banker and ask for advice.

1. In tough times cash is king. Have a close look at every purchase you need to make, and decide if it is worth the money. Will the product generate enough cash to pay for itself? If not, don’t buy it.

2. Let your budget show the way. Without a budget you will find it difficult to cope with hard financial times. Adapt it regularly and do the same with your personal expenses. If you don’t keep track of expenses, they will become a bottomless pit into which all your cash will disappear.

3. Look at your business’s financial position and performance objectively. Do you get maximum returns from your investments? Could you sell those that are not making you money? When times are hard, survival is the only goal.

4. Examine how your debt is structured. If you have an imbalance between short term and long term debt you should restructure your long term debt so that you can pay back the short term debt over a longer period. Be careful not to take a loan against long-term assets, except if you are in critical need of money.

5. Prepare for your meeting with your banker. Make sure you have all cash flow and balance sheets and inventories at hand for your banker. That will make your review time more productive. Write down any ideas regarding your financial position and discuss them with your banker.

6. Ask your banker about the Small Business Administration (SBA) guaranteed loan programs. Your banker could be able to restructure your business debt over a longer period if the SBA is prepared to provide a credit guarantee on your loan to the bank. If your business is situated in a qualifying rural area, you may qualify for a guaranteed loan. Ask your banker about any additional resources which may be of use to your business.

7. Review your insurance coverage. Increase your deductibles and your premium will decrease. Items that are low-risk or obsolete should be removed from your inventory list.

8. Examine your life insurance policies. Some whole life policies have provisions that enable you to borrow against the cash surrender value at very low rates, or you could deduct the cost of the premiums from the cash surrender value. Determine whether your life insurance is worth the money or whether you couldn’t get by at a lower cost. Make sure all key personnel in your company have life insurance so that business can continue in any of the key players’ absence.

9. Deal with financial problems immediately. As soon as a financial problem arises, deal with it immediately. Keep your banker informed of any problems and make him part of your inner circle of confidants. Use your team as a soundboard to discuss financial difficulties and brainstorm solutions.

10. Get some perspective. Sometimes you need to get some distance from your work to solve the problems. Take a weekend off or go and watch a movie – whatever you do, leave your worries behind for a short while and focus on something else – it will make you and your business a lot stronger.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.