1FRINGE

Weekend Argus (Saturday Edition) - - GOODFARE -

Last year’s changes to the tax laws were aimed at en­sur­ing that when your em­ployer pays the pre­mi­ums on your be­half to an un­ap­proved group scheme for life as­sur­ance, lump- sum dis­abil­ity ben­e­fits or funeral ben­e­fits or for an in­come pro­tec­tion pol­icy, this would give rise to a tax­able ben­e­fit.

How­ever, the ex­plana­tory mem­o­ran­dum to the Tax­a­tion Laws Amend­ment Bill 2011 says the lan­guage used in the changes was not ex­plicit enough, and some em­ploy­ers took the po­si­tion that the pre­mi­ums they paid to a group life scheme did not give rise to a tax­able ben­e­fit for an em­ployee.

Hein Daf­fue, San­lam’s le­gal ad­viser, says the South African Rev­enue Ser­vice ar­gues that de­spite the in­ad­e­quacy of last year’s changes, which took ef­fect this year, pre­mi­ums paid by an em­ployer are in any case a tax­able ben­e­fit un­der the def­i­ni­tion of “gross in­come” in the In­come Tax Act. But he says some tax spe­cial­ists do not agree that the em­ployer-paid premium falls un­der this def­i­ni­tion.

The changes to the In­come Tax Act that will be­come ef­fec­tive on March 1 next year are aimed at mak­ing it clear that if your em­ployer pays pre­mi­ums for a pol-

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