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Don't be labelled as a tax avoider! There's an easy way to meet your capital gains tax obligations, starting today!

by , 18 March 2013
Sometimes seen as 'tax avoiders', smart business owners look for all the tax benefits before deciding where to base their businesses. Now non-Australian residents only have until May to benefit from a 50% discount on capital gains tax in the country. Locally, you face huge penalties from SARS for 'forgetting' to pay over capital gains tax when you sell a capital asset, even if you claim you didn't know CGT applies to it. Here's an easy way to avoid being labelled as a tax avoider...

From 8 May, non-residents of Australia will no longer enjoy the 50% discount on capital gain tax related to real estate and mining assets.
 
Capital gain tax applies to the difference between the sales price and the price at which a property was purchased, when it's sold, says Emirates 247.
 
And from 1 July, the tax rate on capital gain for non-residents will be adjusted to make way for an increase to 33% from 1 July 2015.
 
This is proof that Australia has one of the highest capital gain tax rates around the world, and it's one of the few countries to set different conditions for non-residents.
 
In South Africa, capital gains tax is also a huge concern.
 
Meet your obligations as a tax payer by keeping an up-to-date asset register!
 
You have a host of non-compliance penalties and the threat of sanctions to worry about, says Stiaan Klue, Chief Executive of the South African Institute of Tax Practitioners (SAIT) on Bizcommunity
 
'Virtually every taxpayer will at least sometime in his lifetime commit a tax offence,' explains Klue.
 
It could be as simple as failing to keep proper tax records for the required five year period SARS stipulates.
 
The most important of these, from a capital gains tax perspective, is your asset register
 
This will prove you've paid your capital gains tax correctly to SARS and ensure you aren't labelled as a 'tax avoider', says the Tax Bulletin.
 
Pay over capital gains tax correctly on all assets, not just property…
 
Just remember that it's not just the sale of a property that opens you up to capital gains tax.
 
Most capital assets are subject to capital gains tax – even shares, unit trusts, private investments and second-hand policies. 
 
So you'll have to include all of these in your asset register to ensure you mention all asset sales to SARS, says FSP Business.
 
This way, you'll have up-to-date records, and you won't have to resort to excuses like 'I didn't know capital gains tax applied to that' or 'I forgot to tell you I sold it as it was such a small asset' if SARS shows up for a tax audit.
 
It's the easiest way to remember to pay your capital gains tax correctly and save yourself from penalties of up to 200% from SARS! 
 


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