Page 338 - SAIT Compendium 2016 Volume2

IN 18 (3)
Income Tax acT: InTeRPReTaTIon noTes
IN 18 (3)
Less: Less: Less:
Secondary rebate
Section 6A tax credit Section 6B tax credit Section 6quat rebate
Balance of excess foreign taxes brought forward from the 2014 year of assessment Limited to (12 815.41 – 7 650)
(7 110) 29 742,25
-
(12 654,00)
(7 650,00) 9 438,25
(5 165,41) 4 272,84
5 500,00 5 165,41
Amount payable
The balance of R334,59 (R5 500,00 – R5 165,41) may be carried forward to the 2016 year of assessment to be used in determining the foreign tax rebate for that year of assessment.
Example 4 – Natural person receiving foreign dividends and a foreign capital gain
Facts:
D (the taxpayer), aged 26, is a resident. D is married to E, also a resident, who is a member of D’s medical aid.
D derives income from both local and foreign sources during the 2015 year of assessment. None of the income derived by D from a foreign source is attributable to a permanent establishment of D located outside South Africa. D’s employer deducted PAYE of R25 078 based on D’s domestic salary.
The following information is relevant:
Income items:
• Domestic salary income
• Foreign dividends
• Capital gain resulting from the sale of immovable
property located in South Africa
• Capital gain resulting from the sale of shares
in a foreign company
Expense items:
• Donation to section 18A approved public bene t organisation - the taxpayer has a section 18A receipt for the donation
• Qualifying medical expenses
• Medical aid fund contributions
• Foreign withholding taxes on foreign dividends
• Foreign capital gains tax levied in respect of disposal
of foreign shares (Calculation: R360 000 × 20%)
Result:
(a) Calculation of taxable income
Gross income
Salary income
Dividend income
Less:
Exempt income
Section 10B(3) exemption for foreign dividends [R60 000 × 25 / 40]
Income
Taxable capital gain:
Calculation:
Inclusion rate for natural persons: 33,3% Amount included in taxable income
[((R410 000 + R360 000) – R30 000) × 33,3%]
= R246 420
South African portion of total taxable capital gain Calculation
South African source
R
200 000 60 000
410 000 360 000
50 000 31 548 25 000
4 000 72 000
Foreign source
Total
RRR
200 000
(Nil)
200 000
131 211
131 211
60 000
(37 500)
22 500
115 209
Nil
260 000
(37 500)
222 500
246 420
131 211
Nil 60 000
200 000 60 000
Nil
37 500
37 500
330
saIT comPendIum oF Tax LegIsLaTIon VoLume 2
200 000 Nil