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Rental income allowable tax deductions

Posted 22 May 2016 under Tax Questions

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SolidState says:
17 May 2016 at 13:20

I am currently in the UK and need some help regarding various tax related queries before I tax return to South Africa within the next 2 months

Including my tax return I did online before I left. (needs to be finalised)
A bank account change at SARS. (do I have to do it in Person)
I need to register a SA company for VAT. I would like to know how long I must be in the UK to have a tax benefit in South Africa. I have been working here since 1/1/2016 and have to tax return before 31/07/2016
I arrived here on the 29/12/2015. And I am actually planning to tax return 21/6/2016 (176 days)
I also bought a property in South Africa for which I incurred transfer duties and legal fees, now earning rental income as well. Could someone please advise me on the above matters and which documentation you require and what the cost will be for consulting with Tax Tim. I need to know urgently about the days I have to spend outside the country, and if it even matters since there is a tax treaty with the UK. (need to change my flight)

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TaxTimTaxTim says:
17 May 2016 at 14:58

We answer the majority of our users' tax questions for free, but in cases where documents need to be reviewed or extra expertise is required to answer your question, we ask for a R299 payment to assist.

If you would like to proceed with engaging one of our tax professionals for this query, please click here to make payment.

After making payment we will respond to your question within 48 hours.

Thanks for using TaxTim.

TaxTimTaxTim says:
18 May 2016 at 17:43

The work you currently do in the UK, are you there working for an SA company and do you pay tax in the UK. You can make use of our questionnaire on Can I claim a portion of my foreign income as exempt? to determine if you qualify, but you have to be gone for longer than 183 days with 60 of those days being continuous in any 12 month period.

In order to change your bank account you would need to still go into a SARS branch when you come to SA - please read our blog on How to change your banking details at SARS

Regarding your rental income you will have to pay tax on the amount earned less things like rates and taxes and interest payments. What is your net profit each year?

SolidState says:
19 May 2016 at 17:56

I am not making a profit on the rental at the moment.
The property transferred to me on the 13/04/2016
I incurred legal fees in the UK to have all legal documents Notarised.
The rental income is R11 000
My bond repayment is R11 900 and I pay levies of R2500 approx (monthly)

I will change my banking details when I am in SA.
I will also do my tax return asap when I am back, using TaxTim.

TaxTimTaxTim says:
22 May 2016 at 22:21

Bond payments are not tax deductible, only the interest payment - however if you earning less than R75 000 per year in rental profits then you will not be liable to pay tax.

Glad we could assist!

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