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BUDGET SPEECH 2016
How it affects you
PERSONAL INCOME TAX
From 1 March 2016, Government will
provide some tax relief for lower to
middle income earners, compensating
for inflation.
TAX THRESHOLD
This refers to the amount of income
you earn before you need to pay tax.
The new thresholds are as follows:
• under age 65 - R75,000;
• between 65 and 75 - R116,150;
• 75 or older - R129,850.
$ Transfer duty on properties valued in
INTEREST
EXEMPTION
The interest exemption amounts
remain the same. If you are between
the ages of 65 and 75, you can earn a
yearly income of R116,150 plus
R34,500 interest, before you have to
pay tax. If you are 75 or older, you can • The primary residence exclusion
earn an annual income of R129,850
plus R34,500 interest before you have
to pay tax.
CHANGES TO RETIREMENT FUND
CONTRIBUTION DEDUCTIONS
For the first time, Retirement Fund
contribution deductions have been
standardised across all types of
Retirement Funds. A significant benefit
for those earning up to R1,27 million a
year is that they can deduct up to
R350,000 on their Retirement Fund
contributions. The deduction is,
however, capped at R350,000
Provident Fund members will still be
allowed to access their full Retirement
Fund benefit in cash when they retire.
The Retirement Reform proposal has
been put on hold for the next two
years.
CAPITAL GAINS TAX (CGT)
The inclusion rate for CGT for
individuals has increased by 6.7% (from
33.3% to 40%). What does this mean?
Formerly, if you made a capital gain of
R100,000 (by selling shares, for
example), you would have paid CGT on
R33,333. Now, you will pay CGT on
R40,000.
The maximum effective CGT amounts
have been adjusted:
• Individuals and special trusts:
16.4% (inclusion rate of 40%)
• Companies: 22.4% (inclusion rate
of 80%).
The CGT exemption thresholds are as
follows:
• The annual exclusion increased to
R40,000
• The exclusion amount on death
stays at R300,000
remains at R2 million.
ADJUSTMENTS TO MEDICAL
AID TAX CREDITS
Medical tax credits have been adjusted
for inflation as follows:
• R286 p/m for the main member
and the first dependant
• R192 per month for each
additional dependant.
ESTATE DUTY
Estate Duty tax remains unchanged at
20%.
TRUSTS
Treasury is proposing that assets
transferred through a loan to a trust are
to be included in the estate of the
founder of the trust at death and
interest-free loans to trusts are to be
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treated as donations. We are awaiting
clarification on this.
OFFSHORE SPECIAL VOLUNTARY
DISCLOSURE PROGRAMME
If you have undeclared offshore assets
and income, Government has offered a
Special Voluntary Disclosure
Programme from October 2016 to end
March 2017 to regularise your affairs in
exchange for income tax and exchange
control relief. Only companies and
individuals — and not trusts — qualify.
CHANGES TO TRANSFER DUTY
excess of R10 million will increase from
11% to 13% for properties acquired after
1 March 2016, and this will yield an
additional R100 million for the fiscus.
AND THAT BOTTLE OF RUM …
X
If you drink or smoke, you will pay
between 6% and 8.5% more. You can
expect to pay tax on your favourite
sugar-sweetened beverages from 1
April 2017.
The general fuel levy goes up by 30
cents a litre on 6 April 2016.
A new tyre levy of R2.30/kg will take
effect from 1 October 2016.
Taxes on incandescent globes, plastic
bags and motor vehicle emissions are
increased.
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