This document contains a summary of the textbook: Silke: South African Income Tax as well as lecture notes. It encompasses Learning Areas 4 - 8 which is the whole curriculum for the 2nd semester.
BEL 200 chapter summaries and taxable income table illustration
Summary Taxation (BEL200) - Semester 1
All for this textbook (4)
Written for
University of Pretoria (UP)
Taxation (BEL200)
All documents for this subject (7)
2
reviews
By: bmw125iadventures • 1 year ago
By: tyralouwrens • 8 months ago
Seller
Follow
tanyah1
Reviews received
Content preview
Taxation 200 – Semester 2
Contents
LA 4: Chapter 17: Capital Gains Tax .................................................... 2
LA 5: Chapter 7: Individuals ................................................................... 8
LA 6: Chapter 8: Employment Benefits ............................................... 14
LA 7: Chapter 26: Donations Tax (S54) ...............................................22
LA 8: The deceased and deceased estate ...................................... 25
1
,LA 4: Chapter 17: Capital Gains Tax
1. OVERVIEW (S26A)
Definition Came into effect 1 Oct 2001
Tax on wealth/ growth
Asset disposed of for more than original cost
To ensure tax system is equitable
CGT consequences determined under Eighth Schedule of
ITA
Normal Tax Gross Income X
Framework + Special Inclusions X
- Exempt Income (X)
= Income X
- General Deductions (X)
- Special deductions and allowances (X)
- Assessed loss (X)
+ Taxable capital gain X
= Taxable income X
Normal tax calculation based on tax tables X
- Annual rebates for individuals (X)
- Medical fees credit for individuals (X)
= Net normal tax payable for the year X
- PAYE and provisional tax (X)
= Normal tax due by/to taxpayer X
2. SCOPE OF CGT
Proceeds Provision Calculation of gain Include in taxable
income
Revenue in Principal Act Include in gross income Included in GI
nature Deduct expenditure/
allowance
Capital in Eighth Calculate proceeds Apply inclusion rate
nature Schedule (Exclude GI amounts) Include portion in
Deduct base cost taxable income
(Exclude deductions)
Calculation
Taxable income
Other taxable income 1 200 000
Net effect of Principal Act
Capital allowance (CP x %) (100 000)
Recoupment (SP ltd CP – TV) 200 000 100 000
Net effect of Eighth Schedule
SP 650 000
Recoupment (200 000)
450 000
2
, Base cost
CP 500 000
Capital allowances (200 000)
300 000
Net capital gain
Proceeds 450 000
Base cost (300 000)
150 000
Taxable capital gain (40%/ 80% x 120 000
150 000)
Taxable income 1 420 000
3. PERSONS LIABLE FOR CGT
Resident World-wide assets irrespective of type/ location
Non-resident Only certain SA assets
4. BASIC RULES/ BUILDING BLOCKS
1. There has to be an asset
2. There must have been a disposal during YOA
3. Base cost must be determined
4. Proceeds on disposal must be determined
5. DETERMINATION OF TAXABLE CAPITAL GAIN/ LOSSES
Capital G/L = Proceeds – Base Cost
P > B = Capital gain
P < B = Capital loss
Annual Natural persons/ special trusts: R40 000
exclusion Taxpayer dies in YOA: Increased to R300 000
Companies/ ordinary trusts: R0
Unused exclusion cannot be carried forward
Aggregate = Sum of capital gains/ losses for the year – annual
capital G/L exclusion
Net capital = Aggregate capital G/L – assessed capital loss brought
G/ Assessed L forward
Taxable = Net capital gain x inclusion rate
Capital Gain - Individuals – 40%
- Companies – 80%
Example Capital gain: R60 000
Capital loss: R110 000
Other taxable income: R200 000
In previous YOA had an assessed loss of R4 000
3
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller tanyah1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.67. You're not tied to anything after your purchase.
