SARS closing in on ‘super rich’

A special unit has been set up to ensure the lavish, expensive lifestyles of the country’s wealthiest people match what they’re declaring in their tax returns, says a Business Times report. The financial affairs and lifestyles of 267 high-net- worth individuals are already under scrutiny, but the SARS target is to rein in at least 500 by the end of the year. According to the 2007 World Wealth Report, the country has 48 586 dollar millionaires. Anne Jenkins, senior operations manager of SARS’ Large Business Centre, said: ‘These high-net-worth individuals are not declaring all their taxable income and we’re not picking it up because of limited resources. We’ve seen guys get bonuses in the region of R15m, but that submission is not tax payable. They have very smart tax advisers.’ Full Business Times report

Trusts are being targeted by SARS as it tracks the assets of the wealthy, says a Business Times report. In recent years the government has introduced a range of measures to discourage the use of trusts, but they remain opaque and problematic for the taxman and other enforcement agencies. It is difficult to attach the assets of an individual in a trust. A lawyer from Bowman Gilfillan summed it up: ‘Trusts are not a separate legal entity like a close corporation. They’re unique – a law in themselves.’ Full Business Times report