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Pay your capital gains tax when you dispose of assets to avoid tax avoidance penalties!

by , 04 February 2013
Britain's 'Big Four' accounting firms have come under fire for helping their clients avoid tax. Here at home, this year's Budget Speech on the 27th of February is likely to include a few changes to lower the risk of tax avoidance. One of the easiest ways to unintentionally commit tax avoidance is by not paying capital gains tax when you dispose of company assets. Here are the six asset types you'll need to dispose of correctly to avoid huge penalties from SARS.

Senior tax officials from leading accounting firms in the UK have been grilled about their role in helping big companies avoid tax, writes Tom Bergin on Reuters.
The Big Four accounting firms advised the clients to adopt tax schemes that had only a 25% chance of being judged legal by the courts, setting them up for huge penalties for tax avoidance, adds Oliver Wright on the Belfast Telegraph.
Tax avoidance loopholes could be tightened in a few weeks, so make sure you're not caught out

Locally, Finance Minister Pravin Gordhan's 2013 Budget Speech on the 27th of February could lead to changes that lower the risk of tax avoidance, especially as 'last year's speech saw an increased capital gains tax inclusion rate and increased dividends tax rate,' Deborah Tickle, Director of International and Corporate Tax at KPMG writes on Moneyweb.
One way to make sure SARS doesn't accuse you of tax avoidance is to ensure you've paid your capital gains tax when you dispose of assets, the Tax Bulletin reports.
If you dispose of assets at the wrong time, you could face a 200% penalty from SARS.
And most capital assets are subject to capital gains tax.
Capital gains tax applies to the following six asset types

1. Holiday homes, second homes and any properties you rent out to tenants;
2. Shares, unit trusts, private investments and second-hand policies;
3. Boats exceeding 10 metres;
4. Caravans;
5. Krugerrands or other silver, platinum, or gold-minted coins, or any other coin that's market value is mainly in the metal it is made of; and
6. The sale of your business other than when you retire.
The date of the disposal of assets can't be pre-determined or manipulated, so make sure you declare your asset disposal to ensure you aren't accused of tax avoidance for capital gains tax purposes.

For more information on Capital Gains Tax click here...



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