How To Calculate Tax For EasyEquities Shares | South Africa | 2021 скачать в хорошем качестве

How To Calculate Tax For EasyEquities Shares | South Africa | 2021

In this video, we are going to be looking at how you can calculate the tax for the profit on the sale of your shares. So you have purchased shares using your easy equities account and it is now time for you to sell your shares. Now you know as well as me, that we have to pay tax on any income earned as we are socially responsible corporate citizens. That being said, how can we calculate the amount of tax that we have to pay. I am going to briefly go over the theory and then take you through some easy examples in order to solidify the calculation. Let’s start with normal tax i.e. what happens when we sell our shares? Okay so, when we sell shares, we need to determine whether the proceeds from the sale of those shares are either revenue or capital in nature. This is important because depending on whether the shares are revenue or capital in nature, this will affect the tax treatment and the amount of tax you pay, so this is a very important distinguishment. Revenue gains are taxed at a higher rate than capital gains and you as the buyer and seller of shares have to prove to SARS that the shares are capital in nature, otherwise they will just be deemed to be revenue in nature and taxed at the higher rate. For someone who doesn’t have a legal or accounting background, bear with me. So, revenue in nature is where - the shares are held as trading stock and are ones that you bought for the main purpose of reselling at a profit. Any gain or loss you make on disposal of a share you held as trading stock will be of a revenue nature. So realistically, what does this mean - if you are aiming to sell shares which you have bought in the past, purely with the intention of making a quick profit, then SARS will classify the sale of those shares as revenue in nature. Revenue gains are subject to income tax at your marginal tax rate, which may vary between 18% (but effectively 0% if your tax rebates are taken into account) and 40%, depending on the level of your taxable income. On the other hand, we have shares which are of a capital nature. Now capital nature is not defined in the South African tax act and we would have to refer to Case Law and many factors in order to determine if the shares are capital in nature. As this video is meant to keep things simple, there is a simple and easy rule which automatically deems shares to be capital in nature and this is s9C. S9C stipulates that shares are capital in nature when they have been held for 3 or more years before disposal of those shares. Now there are other factors which can deem shares to be capital in nature and they don’t have to be held for 3 years however, these factors are not set in stone and are dependent on the surrounding circumstances. These are beyond the ambit of this video. To keep things simple, hold your shares for a minimum of 3 years, sell them and they will be deemed to be capital in nature and taxed as such. For individuals, capital gains are taxed as follows: first, take the profit, so the difference between what you bought and sold the items for and apply the annual R40 000 exclusion to this amount i.e. you reduce the Capital gain by R40 000. Then take this figure and multiply it by the CGT inclusion rates, which for individuals is 40%. Then you include this amount in your taxable income which then gets multiplied by your tax rate (depending on your tax bracket). Suggested books: The Intelligent Investor - Benjamin Graham The Snowball | Warren Buffett And The Business Of Life - Alice Schroeder Security Analysis - Benjamin Graham and David L. Dodd Beating the Street - Peter Lynch One Up On Wall Street - Peter Lynch The Upside Of Down - Bruce Whitfield What You See Is What You Get - Alan Sugar The Four - Scott Galloway Steve Jobs - Walter Isaacson Structures Or Why Things Don't Fall Down - J.E. Gordon Elon Musk - Ashlee Vance Marketing 4.0 - Philip Kotler Business Stripped Bare - Richard Branson Shoe Dog - Phil Knight Homo Deus - Yuval Noah Harari Video Recording Equipment: Canon M50 Rode VideoMicro Hitfilm Study Table Lamp Social Media: Instagram - @kylekildaire Facebook - Kyle Kildaire LinkedIn - Kyle Kildaire Please note that the information contained in this video is for educational purposes. This is not financial advice. Furthermore, all the material in this video has been used in line with the principles of 'fair use.' If you wish for your material to be removed, feel free to contact me. Lastly, I would like to thank all of you who watch, like or comment on my videos. I truly appreciate it. Please let me know, in the comments below, if there is any topic you would like me to focus on in my upcoming videos. #tax #shares #easyequities #howto Many thanks and kind regards Kyle Kildaire