Create Wealth Through Tax for GPs (RCGP presentation Aug 18)Hannah Xu MAAT
1. The universal rules about tax
2. Maximizing Allowances
3. Saving money on childcare (please note rule change on Oct 18)
4. Sole trader vs limited company
5. When it is worthwhile to register a limited company for locum GPs
6. How to withdraw money from business tax efficient ways
7. Tax reduction strategies for £100k plus earners
8. Q&A
What is Seed EIS?
Seed Enterprise Investment Scheme (SEIS) is the most
generous, tax-advantaged venture capital scheme ever
introduced that offers investors enhanced income tax
and Capital Gains Tax (CGT) reliefs.
Higher rate tax payers and profitable business owners now have a low hurdle threshold to recover up to £50,000 income tax annually.
The 2014 Budget has made this a permanent feature of UK tax savings schemes and this Guide highlights the main conditions that need to be satisfied, but the conditions are complex and you should take professional advice before making an investment.
Another tax year has started and, as always in the world of tax, nothing stays the same. There are a number of methods of
extracting funds from your own limited company and in this Briefing we consider the main options for extracting profit.
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
Create Wealth Through Tax for GPs (RCGP presentation Aug 18)Hannah Xu MAAT
1. The universal rules about tax
2. Maximizing Allowances
3. Saving money on childcare (please note rule change on Oct 18)
4. Sole trader vs limited company
5. When it is worthwhile to register a limited company for locum GPs
6. How to withdraw money from business tax efficient ways
7. Tax reduction strategies for £100k plus earners
8. Q&A
What is Seed EIS?
Seed Enterprise Investment Scheme (SEIS) is the most
generous, tax-advantaged venture capital scheme ever
introduced that offers investors enhanced income tax
and Capital Gains Tax (CGT) reliefs.
Higher rate tax payers and profitable business owners now have a low hurdle threshold to recover up to £50,000 income tax annually.
The 2014 Budget has made this a permanent feature of UK tax savings schemes and this Guide highlights the main conditions that need to be satisfied, but the conditions are complex and you should take professional advice before making an investment.
Another tax year has started and, as always in the world of tax, nothing stays the same. There are a number of methods of
extracting funds from your own limited company and in this Briefing we consider the main options for extracting profit.
Traditionally, this is the time at which we recommend you take stock of tax and-finance for you, your family, and your business. A strategic review before the end of the tax year on 5 April 2021 may suggest ways to structure your affairs more efficiently and make the most of your tax position.
Some planning points this year-reflect the impact of the pandemic.
Here is a detailed guide for year-end tax planning.
Tax Cuts and Jobs Act: Tax Reform UpdateSkoda Minotti
Understand the new tax rules resulting from the Tax Cuts and Jobs Act of 2017, and undertake a general review of the tax changes taking effect in 2018 that result from the Tax Cuts and Jobs Act of 2017.
Legal requirements for various registrations required for Australian business Entity. Registration Requirements for starting a small business in Australia. It describes various requirements for obtaining GST Number, Tax Filing number etc.
Our Spring Tax Updates will be taking place across the region in March 2018.
The update will include the following:
• Comment on the latest legislative changes
• Provide practical advice
• Help to prepare for the end of the tax year
• Give thoughts on the current tax policy
Pay as You Go You are required to pay your taxes in advance in case you fall under certain criteria's.
The handout helps in explaining when you are required to pay your taxes under Pay as you Go tax assessed by Australian Tax Office.
You can also pay tax as per your own calculations rather than as per the schedule given by ATO however in case the estimate falls wrong by 85% you are liable to pay interest as well as penalty.
What does the budget means for you and your clients and, importantly, any tax planning opportunities for high net worth individuals and business owners.
Most observers do not believe that further curbs on public spending can reduce our debts to an acceptable level, thus suggesting that George will have to increase taxes in a way that will not hurt the average citizen. It also suggests that hopes of reforms that reduce tax yields are likely to prove unrealistic. In particular, an increase in the IHT limit (other than the promised limited relief for family homes) seems unlikely. We also expect further pain for non-doms and tax avoiders. We think that some tax relief for small businesses is likely, but as such businesses create scope for tax evasion and avoidance, we are sceptical as to how helpful these are likely to be in practice.
Exeter - Essential 6-monthly Finance Directors' Update - November 2019PKF Francis Clark
This round of seminars will, as always, provide you with key updates and issues affecting FDs and business owners as shown in the programme below. We will also endeavour to include any relevant Brexit updates and will take questions from the audience.
Profit extraction and investment for family and OMB businesses - ExeterPKF Francis Clark
This practical seminar will look at options and opportunities available under current and proposed tax legislation. We will examine the taxation consequences but also highlight broader commercial and practical issues in relation to profit extraction and investment. Our aim is that delegates will have a better idea of how to ensure they and their businesses continue to thrive.
Military Families Learning Network Webinar - his 90-minute webinar will review a variety of time-tested tax and financial planning strategies including offsetting investment capital gains with capital losses, bunching itemized tax deductions, making charitable contributions, accelerating or delaying income, using up flexible savings account (FSA) balances, adjusting income tax withholding, and maximizing contributions to tax-deferred employer retirement savings plans such as 403(b) plans and the Thrift Savings Plan (TSP). This webinar is presented on behalf of the Military Families Learning Network. https://learn.extension.org/events/1675
Profit extraction and investment for family and OMB businesses - Bodmin/RedruthPKF Francis Clark
This practical seminar will look at options and opportunities available under current and proposed tax legislation. We will examine the taxation consequences but also highlight broader commercial and practical issues in relation to profit extraction and investment. Our aim is that delegates will have a better idea of how to ensure they and their businesses continue to thrive.
A review of the 2017 Spring Budget and the impact it may have on individuals and businesses in the South West. Plus, an insight into HMRC's Making Tax Digital initiative.
Tax Cuts and Jobs Act: Tax Reform UpdateSkoda Minotti
Understand the new tax rules resulting from the Tax Cuts and Jobs Act of 2017, and undertake a general review of the tax changes taking effect in 2018 that result from the Tax Cuts and Jobs Act of 2017.
Legal requirements for various registrations required for Australian business Entity. Registration Requirements for starting a small business in Australia. It describes various requirements for obtaining GST Number, Tax Filing number etc.
Our Spring Tax Updates will be taking place across the region in March 2018.
The update will include the following:
• Comment on the latest legislative changes
• Provide practical advice
• Help to prepare for the end of the tax year
• Give thoughts on the current tax policy
Pay as You Go You are required to pay your taxes in advance in case you fall under certain criteria's.
The handout helps in explaining when you are required to pay your taxes under Pay as you Go tax assessed by Australian Tax Office.
You can also pay tax as per your own calculations rather than as per the schedule given by ATO however in case the estimate falls wrong by 85% you are liable to pay interest as well as penalty.
What does the budget means for you and your clients and, importantly, any tax planning opportunities for high net worth individuals and business owners.
Most observers do not believe that further curbs on public spending can reduce our debts to an acceptable level, thus suggesting that George will have to increase taxes in a way that will not hurt the average citizen. It also suggests that hopes of reforms that reduce tax yields are likely to prove unrealistic. In particular, an increase in the IHT limit (other than the promised limited relief for family homes) seems unlikely. We also expect further pain for non-doms and tax avoiders. We think that some tax relief for small businesses is likely, but as such businesses create scope for tax evasion and avoidance, we are sceptical as to how helpful these are likely to be in practice.
Exeter - Essential 6-monthly Finance Directors' Update - November 2019PKF Francis Clark
This round of seminars will, as always, provide you with key updates and issues affecting FDs and business owners as shown in the programme below. We will also endeavour to include any relevant Brexit updates and will take questions from the audience.
Profit extraction and investment for family and OMB businesses - ExeterPKF Francis Clark
This practical seminar will look at options and opportunities available under current and proposed tax legislation. We will examine the taxation consequences but also highlight broader commercial and practical issues in relation to profit extraction and investment. Our aim is that delegates will have a better idea of how to ensure they and their businesses continue to thrive.
Military Families Learning Network Webinar - his 90-minute webinar will review a variety of time-tested tax and financial planning strategies including offsetting investment capital gains with capital losses, bunching itemized tax deductions, making charitable contributions, accelerating or delaying income, using up flexible savings account (FSA) balances, adjusting income tax withholding, and maximizing contributions to tax-deferred employer retirement savings plans such as 403(b) plans and the Thrift Savings Plan (TSP). This webinar is presented on behalf of the Military Families Learning Network. https://learn.extension.org/events/1675
Profit extraction and investment for family and OMB businesses - Bodmin/RedruthPKF Francis Clark
This practical seminar will look at options and opportunities available under current and proposed tax legislation. We will examine the taxation consequences but also highlight broader commercial and practical issues in relation to profit extraction and investment. Our aim is that delegates will have a better idea of how to ensure they and their businesses continue to thrive.
A review of the 2017 Spring Budget and the impact it may have on individuals and businesses in the South West. Plus, an insight into HMRC's Making Tax Digital initiative.
GROWING AND PRESERVING ASSETS THROUGH TAX AND ESTATE PLANNING - Tina Davis, C...IFG Network marcus evans
Presentation by Tina Davis Milligan, CPA, Managing Director, Family Office Services, CTC | myCFO - Speaker at the IFG Wealth Management Forum Oct 2015 at the Trump Doral in FL
Bournemouth - Essential 6-monthly Finance Directors' Update - November 2019PKF Francis Clark
This round of seminars will, as always, provide you with key updates and issues affecting FDs and business owners as shown in the programme below. We will also endeavour to include any relevant Brexit updates and will take questions from the audience.
Westbrooke Associates_SEIS_An Introduction for Investors.pdfWestbrookeAssociates
The Seed Enterprise Scheme (SEIS) is designed to help smaller companies raise money when they
start to trade.
SEIS was introduced on 6 April 2012 and is modelled on the long standing Enterprise Investment
Scheme (EIS), but offers more generous tax breaks to incentivise investors to invest in very early stage
companies - with all the additional risk that entails.
Pre-tax retirement annuity contributions - the tax benefit that very few bene...Annemie Nieman CFP®
We take out retirement annuities for the various tax benefits they offer, however, the benefit of a tax deduction is often only enjoyed 18 months after the first contribution for the tax year had been made, i.e. when tax season opens. This, when the Income Tax Act allows for the benefit of a tax deduction to be enjoyed each month, when the contribution to the retirement annuity is made.
This tax benefit can be utilised to increase take-home pay (for those who do not want to increase their retirement savings) or the tax benefit can be added to the existing retirement annuity contribution. You will then get a tax deduction on the increased contribution as well. It is like a tax saving on top of a tax saving!
Are your clients enjoying the benefit of pre-tax RA contributions?
The interaction between the extensive Portuguese Corporate Income Tax Reform of 2014 with the regime of the International Business Center of Madeira or Madeira Free Zone provides many interesting tax planning opportunities, namely an effective general Corporate Income Tax rate of 5% or a specific effective rate of 0,75% for certain Intellectual Property income. RPBA has fully updated its extensive presentation on this subject.
Residential property can be a lucrative business, but profits or gains will be subject to tax. In this post we discuss some of the property tax planning options, including using limited companies or LLPs, trading vs investment property, capital gains tax and entrepreneurs relief.
Our Budget Presentation slides from June 2010. Given David Smith\'s comments in the Sunday Times on 10 July 2011 I thought it was worth uploading this.
Similar to Tax effective structuring of an overall investment portfolio - 2017-18 (20)
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
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Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
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Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Tax effective structuring of an overall investment portfolio - 2017-18
1. Think Efficient. Realise potential
Tax-effective structuring of an
investment portfolio
28 February 2018
2. 2
Tax evasion versus Tax avoidance
1) Evasion
Do not bank income from product sales.
Declare higher salaries and wages than what was really paid.
Criminal transgression that can lead to prosecution.
2) Avoidance
Declared income agrees with actual circumstances.
Use legal measures that SARS provides to avoid a high tax assessment.
Not an offense and an individual will not be prosecuted.
3. 3
Different stages of tax structuring
1) Pre-retirement
Combining different investment vehicles with different tax characteristics to
provide a tax-sheltered capital base in future.
Examples of these strategies include:
Reduction of annual taxable income.
Tax-free compound income, dividends and capital growth.
Limiting future exposure to estate duty.
2) During retirement
Implementation of a dynamic income-withdrawal strategy to address
income needs from the most tax-exposed investments first and then
from less tax-exposed investments.
The ideal situation is to die with as little investments in your own estate
as possible.
4. 4
Case study
Mr Smith
(48 years old)
Mrs Smith
(46 years old)
Engineer with his own
consultation company,
SmithCon (Pty) Ltd.
He also has a
successful commercial
cattle farm in his own
name.
Physiotherapist with her
own practice.
She also handles all the
administrative issues of
the cattle farm (financial
statements, labour
issues, tax compliance, et
cetera).
Married outside community of property
5. 5
Case study
The Smiths currently have interests in the following investments (in
their own names and as beneficiaries of the Smith Family Trust):
Description Mr Smith Mrs Smith Smith F/T
Unit Trust R5,000,000 - R6,000,000
Cash in bank R100,000 R25,000 -
Pension fund R500,000 - -
Retirement annuity R250,000 - -
Total R5,850,000 R25,000 R6,000,000
6. 6
Case study
The Smiths and the Smith Family Trust’ gross income for the
2017/18 tax year is as follows:
Description Mr Smith Mrs Smith Smith F/T
Salary R1,000,000 - -
Net profit from practice - R100,000 -
Net profit from cattle farm R300,000 - -
Realised capital gains - Unit trust R200,000 - R150,000
Dividends received - SmithCon (Pty) Ltd R1,500,000
Dividends received - Unit trust R250,000 - R130,000
Interest received - Unit trust R150,000 - R220,000
Interest received - Bank account R7,000 R1,750 -
Total R3,407,000 R101,750 R500,000
7. 7
Case study
The Smiths and the Smith Family Trust’ tax liability for the
2017/18 tax year is as follows:
Description Mr Smith Mrs Smith Smith F/T
Taxable income before retirement funds R1,433,200 R100,000 R220,000
Contributions to pension fund (R100,000) - -
Contributions to retirement annuity (R25,000) - -
Taxable capital gains R80,000 - R120,000
Net taxable income R1,388,200 R100,000 R340,000
Tax payable R470,033 R4,365 R153,000
Effective tax rate 33.86% 4.37% 45.00%
8. 8
Case study
How can the Smiths restructure
their and the Smith Family Trust’
investments more effectively for
tax purposes?
9. 9
Case study
1) There is no donations tax applicable between spouses and
individuals younger than 65 can receive interest income of R23,800
tax free. Mr Smith can therefore donate R2,500,000 of his unit trust
and R37,500 of his cash in the bank to Mrs Smith to invest in her
own name.
2) Mr Smith can contribute 27.5% of his total taxable income to
retirement funds and receive it as a tax deduction (subject to a limit
of R350,000 per year). He currently only contributes approximately
9.0% of his total taxable income. He can therefore contribute
another R225,000 to his retirement annuity and receive a tax
deduction for it.
3) Mr Smith currently doesn’t pay a salary to Mrs Smith for the administrative
duties that she performs for the farming activities. He can start paying her a
market related salary of R15,000 per month (R180,000 per year) and claim
it as an expense against the farming income.
10. 10
Case study
4) If Mr Smith donates half of the unit trust investment as discussed earlier
and he pays her a salary of R180,000 per year she can also contribute
27.5% of her total taxable income to a retirement annuity (limited to
R350,000 per year).
5) The first R40,000 capital gains that an individual receives in a tax year is
exempt from capital gains tax. If Mr Smith donates half of the unit trust
investment as discussed earliers his taxable capital gains will reduce from
R160,000 to R60,000 and Mrs Smith will now also have taxable capital gains
of R60,000.
6) Mr and Mrs Smith can both contribute R33,000 per year to tax free savings
accounts. By contributing to these investments they will reduce their future
exposure to income tax, capital gains tax and dividend tax significantly.
11. 11
Case study
8) The Smith Family Trust unit trust of R6,000,000 can be liquidated and the
funds can be invested in a sinking fund. By doing this the income tax on
future income will be limited to 30% (currently 45%) and capital gains tax
on realised capital gains to 12% (currently 36%).
7) There is a general perception that dividend tax is only 20%. However, if it is
taken into account that dividends are declared from after-tax income the
effective combined tax rate for a company that declares dividends is
42.40% (28% + (20% of 72%)).
Up until a taxable income of R1,500,000 the marginal tax rate for
individuals is 41%. Any income that exceeds R1,500,000 will be taxed at
45%. Mr Smith must structure his salary and dividends from SmithCon (Pty)
Ltd in such a way that his combined tax rate is as low as possible.
12. 12
Case study
After all this restructuring, have
the Smiths’ overall tax situation
changed materially?
13. 13
Case study
The Smiths’ interests in their investments are now as follows:
Description Mr Smith Mrs Smith Smith F/T
Unit trust R2,500,000 R2,500,000 -
Sinking fund - - R6,000,000
Cash in bank R62,500 R62,500 -
Pension fund R500,000 - -
Retirement annuity R250,000 - -
Total R3,262,500 R2,562,500 R6,000,000
14. 14
Case study
The Smiths and Smith Family Trust’ gross income for the
2017/18 tax year is now as follows:
Description Mr Smith Mrs Smith Smith F/T
Salary R1,096,652 R180,000 -
Net profit from practice - R100,000 -
Net profit from farming activities R120,000 - -
Realised capital gains - Unit trust R100,000 R100,000 -
Realised capital gains - Sinking fund - - R150,000
Dividends received - SmithCon (Pty) Ltd R1,403,348 - -
Dividends received - Unit trust R75,000 R75,000 -
Dividends received - Sinking fund - - R130,000
Interest received - Unit trust R75,000 R75,000 -
Interest received - Cash in bank R4,875 R4,875 -
Interest received - Sinking fund - - R220,000
Total R2,874,875 R534,875 R500,000
15. 15
Case study
The Smiths and Smith Family Trust’ tax liability for the
2017/18 tax year is now as follows:
Description Mr Smith Mrs Smith Smith F/T
Taxable income before retirement funds
contributions R1,272,727 R336,075 R220,000
Contributions to pension fund (R100,000) - -
Contributions to retirement annuity (R250,000) (R92,421) -
Taxable income after retirement funds
contributions R922,727 R243,654 R220,000
Taxable capital gains R60,000 R60,000 R150,000
Net taxable income R982,727 R303,654 R370,000
Tax payable R303,789 R50,409 R84,000
Effective tax rate 23.87% 16.60% 22.70%
The effective tax rate above is calculated by dividing the “Tax payable” by the “Taxable income after
retirement fund contributions”.
16. 16
Case study
Conclusion:
Description Mr Smith Mrs Smith Smith F/T
Total tax payable before restructuring R470,033 R4,365 R153,000
Total tax payable after restructuring (R303,789) (R50,409) (R84,000)
Total tax saving R166,244 (R46,044) R69,000
Retirement annuity value before
restructuring R250,000 -
Retirement annuity value after
restructuring R500,000 R92,421
Additional provision for retirement R250,000 R92,421
The Smiths not only save net total tax of R120,200 for the tax year, but they have also invested an
additional 342,421 for retirement in their retirement annuities which makes the total benefit for the
year R462,621.
The Smith Family Trust saves total tax of R69,000 for the tax year.
17. 17
Case study
- Last thought - What was Mr and Mrs Smith’s guaranteed
returns on their retirement annuity contributions?
Description Mr Smith Mrs Smith
Gross contributions to retirement
annuities R250,000 R92,421
Marginal tax rate on income 41.00% 31.00%
Refund from SARS (R102,500) (R28,650)
Net contributions to retirement annuities R147,500 R63,770
Guaranteed returns 69.49% 44.93%
19. Contact me:
E: henri@efw.co.za
T: +27 (0)51 447 6094
S: +27 (0)79 515 2306
19
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