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Summary Exempt Income
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This document provides a detailed summary of the exempt income dealt with in the Tax legislation.
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LML4804 PORTFOLIO MEMO - MAY/JUNE 2023 - SEMESTER 1 - UNISA - (DETAILED ANSWERS - DISTINCTION GUARANTEED!)
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Special Deductions
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Prohibited Deductions
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ExemptionsS10(1)(i) Interest from NP Must be natural person
<65 R23 800
>=65 R34 500
S10(1)(k) Local dividends
S12T Tax free investments Owned by natural person or deceased.
Limit of (per natural person)
- R36 000 per year
- R500 000 in lifetime
(applies to all investments, not just per investment).
Excess x 40% will be taxed
S10(A) Purchased Annuities Dealt with in Retirement Benefits.
Capital portion is exempt, while the interest is taxed.
S10(C) Qualifying Annuities Dealt with in Retirement Benefits.
Exempt: deductions not deducted under 11F
S10(B) Foreign Dividends Exempt if:
>10% voting rights and equity shares
Listed share and does not constitute asset in specie
Not exempt (not any of the reasons above):
NP, deceased estate, trust = 25/45
Company = 8/28
S10(1)(gC) Foreign pension/ Compensation for past employment
annuity/ lump sum
S10(1) UIF
(mB)
S10(1)(nA) Uniform + allowance Clearly distinguishable from ordinary clothing
Required to wear while on duty
If not, included in GI under par (c)
S10(1)(nB) Relocation Benefits Employer must pay for the costs/ reimburse the
employee
Transport the employee, members of family AND
their personal belongings from old residence to new
residence
Hotels (for max 183 days) which must be temporary
Examples of expenses: school uniform, replacement of
curtains, vehicle registration, transfer duties.
S10(1)(o) Employment outside Requirements:
SA >183 days outside SA in 12 months AND
>60 days continuously
Then exempt
Exemption limited to R1.25 mil
S10(1)(q) Bursaries Requirements:
Must be for bona fide scholarship or bursary
Granted to enable person to study
Must be at recognized educational institution
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