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As far as income tax is concerned, these proposals are applicable to the 2 Please note that this is just a summary, and is proposals made by the Minister. The final legislation may differ from these proposals. Personal tax: Individuals (See Annexure A) |
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| • | Lowest tax rate of 18% applicable on taxable income up to R189 880 (R188 000) |
| • | Marginal rate at 41% on taxable income above R708 300 and a new tax bracket of 45% on taxable income above R1 500 000 (41% on R701 300) |
| • | Rebate under 65 years of age – R13 635 (R13 500) 65 years and older – R21 114 (R20 907) 75 years and older – R23 607 (R23 373) |
| • | Interest exemption under 65 years of age – R23 800 (unchanged) 65 years and older – R34 500 (unchanged) |
| • | Tax threshold R75 750 (R75 000) 65 years and older – R117 300 (R116 150) 75 years and older – R131 150 (R129 850) |
| • | Medical fund contributions qualify for medical tax credits per year of R3 636 (R3 432) per person for the first two members and R2 448 (R2 304) per person for each additional member. |
| • | Tax brackets in respect of lump sum benefits on retirement are unchanged (Annexure B). |
Transfer Duty Amended in respect of properties bought on or after 1 March 2017. ALL natural persons and legal entities: New – From 1 March 2017 Previous – Until 28 February 2017 Donations Tax (unchanged) |
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| • | Exempt up to R100 000 p.a. |
| • | Donations tax payable at 20% by donor |
Estate Duty (unchanged) |
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| • | Basic deduction: R3,5 million |
| • | In case of a married couple, the survivor has an exemption of R7 million less so much of the exemption utilised by the first-dying |
| • | Tax rate: 20% |
Capital Gains Tax (unchanged) Capital gains tax inclusion rates increase: |
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| • | Individuals: 40% |
| • | Companies and trusts: 80% |
| Exclusions for individuals increase: | |
| • | Annual exclusion: R40 000 |
| • | Exclusion on death: R300 000 |
| • | Primary residence: R2 000 000 |
| • | Small business exclusion [assets up to R10 million]: R1 800 000 |
VAT (unchanged) |
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| • | Rate unchanged at 14% |
| • | Compulsory VAT registration if turnover more than R1 million per year (unchanged) |
Trusts |
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| • | Rate increases to 45% (41%) |
| • | Conduit principle remains |
Dividend Withholding Tax |
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| • | Rate increases to 20% (15%) |
| • | Effective 22 February 2017 |
Other announcements |
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| • | Tax rate for company unchanged at 28% |
| • | Turnover tax for micro business unchanged (Annexure C) |
| • | Tax rate for small businesses amended slightly (Annexure D) |
| • | Increase of duties on alcohol and tobacco products |
| • | Qualifying foreign employment income only exempt from tax if subject to tax in the foreign country |
| • | Anti-avoidance measures in respect of section 7C are proposed, in order to include loans to companies owned by a trust, with certain exemptions |
| • | Tax free savings account annual allowance increases to R33 000 p.a. (R30 000) |
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With kind regards Pieter Steenkamp Source Reference Pieter Steenkamp Belasting- en Boedelspesialis Piet Retiefstraat 6, Posbus 593, Montagu, 6720 Tel: 023 614 3100 Faks: 023 614 3200 Ook te Stellenbosch: |
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018 tax year, i.e. year ending 28 February 2018 for natural persons. Amounts shown in brackets refer to the previous year.