EXEMPTIONS

Question 1

EXEMPTIONS

Answer 1

(1) ALIMONY
(2) FOREIGN PENSION
(3) UIF BENEFITS
(4) GOVERNMENT GRANT
(5) WAR PENSIONS AND AWARDS FOR DISEASES
(6) SA SOURCE INTEREST/ROYALTIES RECEIVED BY NON-RES
(7) INTEREST
(8) TAX-FREE INVESTMENTS
(9) SA DIVIDENDS
(10) FOREIGN DIVIDENDS
(11) ANNUITIES

Question 2

WAR PENSIONS AND AWARDS FOR DISEASES

Answer 2

ANY AMOUNT RECEIVED AS:
- WAR PENSION
- COMPENSATION IRO DISEASES FROM MINING
- RAF, DISABILITY PENSIONS
- IF DEATH ARISES OUT OF EMPLOYMENT, LIMITED TO 300000.

Question 3

SA SOURCE INTEREST/ROYALTIES RECEIVED BY NON-RES

Answer 3

WITHHOLDING TAX OF 15%
EXEMPTED, UNLESS:
- Natural person physically present > 183 days or
- Debt connected to permanent establishment in SA.

Question 4

INTEREST

Answer 4

THE AMOUNT EXEMPTED WILL DEPEND ON THE PERSON’S AGE, ONLY APPLIES TO SA INTEREST:
- INDIVIDUAL < 65 = 23 800
- INDIVIDUAL > 65 = 34 500

Question 5

TAX-FREE INVESTMENTS

Answer 5

CONTRIBUTION MUST BE CASH AND UP TO 36000 PER YEAR EXEMPTED
- PENALTY TAX FOR OVER CONTRIBUTION, 40% ON THE EXCESS.
- ALL PROCEEDS EXEMPTED.

Question 6

SA DIVIDENDS

Answer 6

EXCLUSIONS
- DISTRIBUTION BY REIT
- SUBJECT TO NORMAL TAX AND NOT DIVIDENDS TAX

Question 7

FOREIGN DIVIDENDS

Answer 7

FULL EXEMPTION IF:
- TAXPAYER HOLDS AT LEAST 10% OF EQUITY SHARES
- COMPANY TOGETHER WITH GROUP HOLDS AT LEAST 10% OF EQUITY SHARES
PARTIAL EXEMPTIONS
A = B x C B = 25/45 natural, 7/27 companies
C = Gross amount of dividends

Question 8

ANNUITIES

Answer 8

ONLY A PORTION OF AN ANNUITIES PURCHASE AMOUNT IS EXEMPTED:
Y = A/B x C
A = LUMPSUM PAID BY INSURED
B = TOTAL EXPECTED RETURNS OF ALL ANNUITIES
C = THE AMOUNT OF THE ANNUITY

Question 9

TERMINATION OF THE ANNUITY

Answer 9

X = A - D
A = AMOUNT ORIGINALLY PAID
D = TOTAL OF PREVIOUSLY EXEMPT PORTIONS