MISS­ING A KEY POINT

Finweek English Edition - - INVESTMENT -

All the talk around the budget speech by Min­is­ter Pravin Gord­han is that he missed an im­por­tant point. He did not in­crease the cap­i­tal gains ex­clu­sion or the in­ter­est ex­clu­sion, the amount that is tax-free be­fore ei­ther cap­i­tal gains or in­ter­est re­ceived is taxed. Es­sen­tially, this is tax by stealth, by not in­creas­ing the lev­els (and the CGT [cap­i­tal gains tax] com­po­nent is sel­dom in­creased) we es­sen­tially get hit with tax quicker as the R30 000 CGT ex­clu­sion doesn’t go as far as it did a year ago. That said, this re­ally is a 1% is­sue as the vast ma­jor­ity of South Africans never in­cur any cap­i­tal gain, never mind more than R30 000 worth of cap­i­tal gain. SARS also re­leased a new Tax Guide for Share Own­ers that you will f ind on their web­site and it is a must read for both you and your ac­coun­tant. *The writer owns shares in Old Mu­tual.

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