Request for Supporting Documents but I have not been employed for 3 years

Charlie says:
23 September 2015 at 11:00

SARS is asking for supporting documents related to my tax return but I have been unemployed and living abroad for three years! I don't have any of the documents they are requesting. I still pay provisional tax and submit that tax return dutifully. I read that I must swear an affidavit at a police station but I am currently not in the country and won't be back for several months - they need these supporting documents in 21 days. What must I do? (I did email them, asking them what to do, but they said that their turn around time on queries is ALSO 21 days... So that won't help. )

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TaxTim TaxTim says:
23 September 2015 at 17:17

What earnings are you paying provisional tax on?

Charlie says:
23 September 2015 at 20:12

I am earning rental income on a property that I own but it doesn't have an IRP5 or any of the other documents associated with it.

Charlie says:
23 September 2015 at 20:14

They ask for one of these:
- IRP5/IT3(a) employee income tax certificates in respect of
remuneration income and lump sums from your employer/pension fund
- IT3 certificates (for example IT3(b) and (c)'s from financial
institutions in respect of interest and capital gains)
- Medical scheme certificates and receipts
- Income Protection and retirement annuity certificates
- Your travel logbook and/or invoices or detailed calculation in
respect of travel claims
- Any other documents relevant to your declaration.

My rental income is declared on my provision tax return but, after interest and agent's management fees are removed, the total is below the taxable threshold. Perhaps they want my bank statements, because that is all I have.

TaxTim TaxTim says:
23 September 2015 at 22:41

You could draw up a simple excel spreadsheet which reflects your rental income for the year, less rental related expenses. You could submit this together with back-up for agent's fees (eg. invoice/statement) and support for loan interest (eg. bank statement with interest amounts highlighted)

Charlie says:
24 September 2015 at 12:29

Should I send every bank statement for the whole year or only one or just a few (say, 3)? I can provide an invoice from the management company showing agent's fees. I already have a spreadsheet because I use it to generate the numbers for the provisional tax forms (period 1 and 2) each year and, in period 1, to calculate the estimates for the whole year. Should I attach a cover-letter explaining the document pack?

TaxTim TaxTim says:
25 September 2015 at 18:53

You can request a Tax certificate from your bank for the year under assessment which will reflect total interest for the year.
If you upload a spreadsheet, with supporting agent fees invoice and bank statement with interest total, it should be self-explanatory to SARS and no covering letter should be required.

Charlie says:
27 September 2015 at 5:27

Is this tax certificate an IT3(b)? I thought that was a certificate showing total interest earned, not total interest charged. If I want the latter, for what do I ask the bank? Secondly, I do actually have all the three-monthly home loan statements for the tax year, which clearly show the interest charged. Isn't it easier just to upload all four of these, with the amounts highlighted?

TaxTim TaxTim says:
27 September 2015 at 15:10

The bank should be able to give you a summary Tax Certificate reflecting total finance charges on your loan for the year. However, if you have the individual home loan statements then it will be fine to upload these.

Charlie says:
27 September 2015 at 16:09

Thanks. I have uploaded all the invoices from my management company for the year, the home loan statements for the year (turns out that every 6-monthly one had six months of data on it so I only needed to upload two documents) and a summary spreadsheet.

I also realised that a single property's rental turnover can now be represented on the ITR12 under "Local Business, Trade and Professional Income" so I submitted a revision to my ITR12. I have to pay a penalty for late submission, now, but I would rather pay and be transparent with SARS than save the cash. I entered the total rental income and the three expenses (management fees, maintenance and loan interest).

I guess I could have added more costs for a greater deductions but the grand total is below the tax threshold and those extra deductions would make no difference to the calculation.

TaxTim TaxTim says:
27 September 2015 at 16:52

Please see Rental property deductions you can deduct in future.

Glad we could assist you :)

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