Hide
Earn under R350,000? Click here to see why you still need to file to get your Tax Refund.
CLOSE
Get Tax Deadline Reminders, News and Tips
 

We'll tell you when you need to file, along with tax tips and updates.
Try Tim Now

What does "ring-fencing" mean especially in relation to property claims?

Posted 1 July 2013 under Tax Questions


Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
When earning rental income there is a big section on your tax form to fill out. At the end of this section you specify whether it was a profit or loss (4210 and 4211). For a loss (4211) you get the option of ring-fencing with the text "Should the loss incurred be excluded (ring-fenced) for the calculation of your tax liability?"

What does this option mean? Everything I've read about it is incredibly confusing and full of legal jargon I don't understand. Under what circumstances should you select "yes" or "no" and how does this affect your final tax calculation? I'm asking this in relation to property for which you receive rental income although this option will still be available for any other trade.

This entry was posted in Tax Questions and tagged , , . Bookmark the permalink.

TaxTimTaxTim says:
1 July 2013 at 22:23

This can get very complicated however the basic principle is that you could ringfence the rental income loss to only apply to rental income profits in future years to reduce the tax paid on that profit. This would be a decision you wish to make, but in essence by selecting to ringfince the loss you are delaying the tax benefit of the loss.


Get Tax Deadline Reminders, News and Tips
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →

Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE