SARS MUST give you an opportunity to explain the apparent 'unexplained' amount.
The most common attempt is to try and prove receipts are of a capital nature, which means the unexplained increase wouldn't be taxable.
Remember that the onus is on YOU to prove whether the unexplained increase is accurate, how exactly you financed it and whether it
represents receipts of a capital nature.
In other words, it's up to you to make explanations, and provide evidence for them.
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If you claim that the capital increase is from bequest or inheritance, you must substantiate this with documentary evidence. E.g. A copy of the will, The Executor's final reconciliation etc.
If you make a donation to a trust each year as part of your estate planning, ensure you have a written declaration of the donation.
*Remember that if you can't provide a satisfactory explanation, the capital increase will be subject to tax and penalties of 200%!
What's more is that if SARS suspects evasion, they'll open up a criminal investigation.
To learn more on Capital Reconciliation, turn to chapter C08: Capital Reconciliation
in your Practical Tax Loose Leaf Service
handbook, or click here
if you don't already have it.