only have until 31 January to submit their tax returns
via eFiling. But before you hit the 'submit' button on your tax return, double check you've included your taxable capital gain
'Failure to account for capital gains tax
in you provisional [tax] return
could result in heavy penalties for taxpayers basing their second provisional tax payments on estimates of taxable income
lower than the basic amount, cautions Arendse.
'If you're a provisional taxpayer
and you estimate your taxable income
for the first, second and third provisional tax
periods, you must take your capital gain
for the year into account, unless you're entitled to base your estimate on the 'basic amount' (i.e. last year's taxable income
.), explains the Practical Tax Loose Leaf Service
'To do this, simply exclude any taxable capital gain
from the basic amount for an earlier year of assessment, because the taxable capital gain
is usually irregular,' it continues.
When do you have to pay CGT?
'Affected capital assets
are considered to be property of any kind, including assets that are movable or immovable, tangible or intangible, excluding trading stock and mining assets qualifying for an income tax deduction as capital expenditure,' states SARS' Guide to Capital Gains Tax
published on http://www.treasury.gov.za
With such a complicated explanation, it's easy to see why many provisional taxpayers
who submit their own tax returns
are unsure of what assets actually trigger CGT
Use this list to ensure you're not one of them.
Before you work out your capital gains tax liability, know this…
In essence, all assets regardless of their nature are considered affected capital assets
and, therefore, are subject to CGT
This includes assets like:
Plant and machinery
Kruger rands and much more.
If you're unsure how to work out your capital gains tax liability
or need more information on whether you need include an asset in your capital gains tax
calculation, speak to a professional tax
consultant today. Failure to do so could land you in hot water with SARS
To get the lowdown on Provisional Tax
, check out this great Provisional Tax 101 e-book