Tax changes for offshore investment schemes
Taxpayers can expect changes relating to the tax treatment of investments in offshore schemes in the future, says Ernest Mazansky, a director at Werksmans Tax, in a report in Business Day.
Under the changes to the Income Tax Act, shares that are redeemed will no longer be regarded as a dividend. An amount paid by a company when it sells its shares will be considered a capital receipt. If a taxpayer can prove to the SA Revenue Service that the investment offshore is held as a capital asset and not as a speculation, the gain will be subject to capital gains tax at the rate of 10% rather than income tax at the rate of 40%, Mazansky added. The changes are contained in the Revenue Laws Amendment Bill, which is before Parliament (and which will be passed unamended). Full report in Business Day Revenue Laws Amendment Bill Revenue Laws Second Amendment Bill