Written by Nicci
Posted 26 May 2025
A beneficial owner is the person who ultimately owns or benefits from an asset or income, even if it is registered in someone else's name.
For example:
If a trust owns a rental property, and you receive the rental income from it, you are the beneficial owner — even though the property is not in your name.
In the case of a partnership, the beneficial owner is a partner who receives a share of the p...
Written by Nicci
Posted 26 May 2025
An IT3(BO) is a form issued by a partnership to SARS that shows your share of income as a beneficial owner in the partnership.
It provides SARS with third-party confirmation of who the beneficial owner is and what income (or capital) they are entitled to. This is especially relevant when there are multiple partners e.g a large law firm.
Written by Nicci
Posted 23 May 2025
The Section 13sex residential unit deduction is a South African tax break for people who invest in new rental properties. If you build or buy new units to rent out, you can deduct part of the building cost from your taxable income each year. To qualify, you must own at least five new and unused residential units in South Africa that are used for rental.
You can claim 5% of the building cost
Written by Alicia
Posted 23 May 2025
What is a financial instrument according to SARS?
A financial instrument is a contract that represents money or something of value. For one party, it’s an asset (something valuable), and for the other party, it’s a liability (something owed) or equity (ownership).
According to SARS, a financial instrument is defined to include:
“a share, a member’s interest in a company, a debenture, a unit in a unit trust
scheme, a participatory interest in a portfolio of collective investments scheme, a...
Written by Evan
Updated 23 May 2025
Your IRP5 has two fields on it that relate to Pay Periods:
A Pay Period describes an amount of time within a year that you were employed by your employer.
This can be an amount in:
Written by Evan
Updated 22 May 2025
A partnership is an association between 2 - 20 people who are contractually bound to one another in order to operate a joint, profit-making business together. Each member of the partnership contributes their money, goods or services to a shared fund, agreeing that any profits made will be shared between the partners as per a contract between them. A partnership does not have to be registered with the companies registrar CIPC. Partners in a partnership are taxed on their percentage of the taxa...
Written by Nicci
Posted 21 May 2025
In South Africa, a deemed disposal happens when you’re treated as if you sold an asset—even though you didn’t actually sell it. This is important for Capital Gains Tax (CGT), because it can trigger tax on gains you haven’t yet received in cash.
Here are some common examples:
Written by John
Updated 21 May 2025
Taxable income is the amount on which tax will be calculated on.
Formula for Taxable Income:
Taxable income = Gross Income - Exempt Income - Allowable Deductions + Taxable Capital Gains.
Taxable capital gains are the taxable portion of the profit earn...
Written by Elani
Updated 20 May 2025
For SA residents: "Gross income" is the total amount of worldwide (local and foreign) income that you earned during the tax year, excluding income that is of a capital nature. (Income of capital nature is money earned from selling your possessions, e.g. sale of your house).
Please note that "income" also includes money that is owed to you for work you performed, even...
Written by Alicia
Posted 19 May 2025
Written by Alicia
Posted 19 May 2025
If I run a small business and buy an asset like a vehicle for R200,000 (paid in full and not financed), can I deduct the full amount from my taxable income in the same year? Or do I only deduct the depreciation amount each year?
Also, do vehicles qualify for the 50/30/20% depreciation rule over three years like other small business assets?
Written by Alicia
Updated 15 May 2025
The enhanced tax incentive recently introduced by the government, known as Section 12BA, aims to promote private investment in electricity generation from renewable energy sources to help alleviate the energy crisis in the country. This incentive is a temporary enhancement of the existing renewable energy tax incentive found in section 12B of the Income Tax Act.
Below are the key points:
Availability and Duration
The incentive is available from 1 ...
Written by Nicci
Posted 14 May 2025
South Africa introduced the Two-Pot Retirement System to help people access part of their retirement savings before retirement age, while keeping the rest for retirement. It's a helpful system – but it comes with tax rules that can surprise some people.
If you withdrew from your Two-Pot in the tax year, you need to include the details of this withdrawal in your annual tax return. The fund should have issued you an IRP5/IT3a tax certificate which reflects the withdrawal amount (source code 3926), related tax as well as the tax directive number issued by SARS...
Written by Evan
Updated 13 May 2025
An Income Tax Return (ITR12) is a form that SARS requires all individuals (including provisional taxpayers) to complete and submit to SARS once every year.
The form is used to declare your income, deductions and tax credits to SARS, so that SARS can calculate how much tax you need to pay, or the refund due to you.
Taxpayers, including provisional taxpayers, only need to complete and submit an ITR12 (income tax return) once a year. The ITR12 form allows you to capture all your ...
Written by Evan
Updated 13 May 2025
An IRP6 is a Tax Return completed by provisional taxpayers twice during the tax year to declare their estimated taxable income.
The first provisional tax return must be submitted six months into the tax year (i.e end of August) and the second provisional tax return by the end of the tax year (i.e end of February). Just like regular taxpayers, provisional taxpayers also need to submit their annual income tax return (ITR12) after the tax year that has passed.
It is important to ...
Written by Alicia
Posted 13 May 2025
A financial instrument is a contract that represents money or something of value. For one party, it’s an asset (something valuable), and for the other party, it’s a liability (something owed) or equity (ownership).
Written by Nicci
Posted 7 May 2025
Deemed annuities are regular payments made by the trust to a beneficiary that are treated as taxable income, even though they are not from a formal annuity policy.
SARS sees these fixed or regular trust payments as income (like a salary or pension), and the beneficiary must pay tax on them.
Written by Nicci
Posted 7 May 2025
A trust is a legal arrangement where a person or people (called the trustees) manage money, assets, or property for the benefit of others (called the beneficiaries).
It is often used to protect family wealth and provide for children or dependents.
The income in a trust is taxed at 45%. If income is distributed to beneficia...
Written by Nicci
Posted 7 May 2025
A beneficiary is a person or entity who receives income or assets from a trust, estate, retirement fund or life insurance fund.
In a trust, income distributed to beneficiaries is usually taxed in the hands of the beneficiary, not the trust (based on the “conduit principle”).
In the case of an estate, the estate pays tax before the inheritance is passed on, so the beneficiary usually ...
Written by Alicia
Updated 7 May 2025
A deemed dividend from a trust is when a company pays money to a trust, and that payment is treated as if it were a dividend, even though no formal dividend was declared.
It usually applies when a trust connected to company shareholders receives a benefit from the company. SARS treats it as if the company paid a dividend to the shareholder.
This happens in s...
Written by Alicia
Updated 7 May 2025
The assets and liabilities section in the annual tax return (ITR12) needs to be completed if you:
Each asset should be reported at its original cost — the amount you paid at the time of purchase or investment. According to SARS, these entrie...
Written by Alicia
Posted 6 May 2025
A local capital gain is a a profit made on the sale of any local asset such as a property (primary residence or rental property), shares (listed or unlisted), unit trusts or cryptocurrencies.
A profit is made when you sell the asset for more than you paid for it.
A capital loss is a loss incurred on the sale of an asset such as a property (primary residence or rental property), shares (listed or unlisted), unit trusts or cryptocurrencies.
A loss is made when you sell t...
Written by Alicia
Posted 6 May 2025
Any foreign debts, payable to either a foreign, bank, company or individual as at the end of the tax year.
Written by Alicia
Posted 6 May 2025
Foreign assets refers to the value of your foreign properties, investments and any other assets you own abroad at the end of the tax year.
Written by Alicia
Posted 6 May 2025
Local liabilites are the amounts you owe to banks, companies, businesses or people in South Africa.
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