90 replies to this topic

[orca]

One more question please.

If you are classed as a trader, your investments will be regarded as closed at tax year end and will pay tax as if you sold them. Then the next day they will open at the new base cost.

I somehow recall my accountant saying this. Should I change accountants?

 

[orca]

If you a total noob with tax then try www.taxtim.com

You can't get it easier. Now if only SARS would have a similar program nobody will make mistakes or leave stuff

out like I did.

[orca]

According to her, SARS won't audit me as she worked for SARS for  25 years as an accountant and is registered with SARS as a consultant. It will cost me R6k which is quite reasonable. 

[TheImposter]

There is no reason that you shouldn't be allowed the tax losses but because of the time lag SARS are definitely going to want to verify your earnings and losses. In other words they are going to conduct some sort of audit on you.

 

The correct way to rectify the position is thorough the voluntary disclosure program so your accountant is correct in the process she is following. 

[orca]

The reason I ask is that I had not included my trades in my tax since 2008 tax year and my accountant has applied for amnesty on my behalf before she reconciles my tax to date.

During the 2008/9 crash my losses were more than 2 years of my normal earnings.

 

[Beorn]

All your income is combined for tax purposes and any trading loss reduces other income. If this results in a net loss position that loss will be carried over to the next tax year.

 

The only exception to this is if your trading loss is ring fenced and then only trading income can be set off against the trading loss.

 

You can elect to have the loss ring fenced if you earned more that R617 000 (the threshold at which the 40% maximum tax rate applied in 2013) from all other sources and are forced to ring fence it if you run losses for 3 years out of any 5 year period.

 

Thanks, sound like you have looked at this before.

Now I also know.

[Beorn]

I would have thought that all your income would be combined for tax purposes.

 

I'm not that clued up on personal tax, but I don't think so.

I will have a look and get back to you

[TheImposter]

All your income is combined for tax purposes and any trading loss reduces other income. If this results in a net loss position that loss will be carried over to the next tax year.

 

The only exception to this is if your trading loss is ring fenced and then only trading income can be set off against the trading loss.

 

You can elect to have the loss ring fenced if you earned more that R617 000 (the threshold at which the 40% maximum tax rate applied in 2013) from all other sources and are forced to ring fence it if you run losses for 3 years out of any 5 year period.

[orca]

Yes, it carries over. But, I think it is only for your trading income, I don't think you can offset it against your main income stream.

I would have thought that all your income would be combined for tax purposes.

[Beorn]

The tax thread is gone so starting a new one.

A Capital Loss carries over to the next year.

A Trading Loss is deducted from your income. Now if this trading loss is more than your income, does this also 

carry over?

 

Yes, it carries over. But, I think it is only for your trading income, I don't think you can offset it against your main income stream.

[orca]

The tax thread is gone so starting a new one.

A Capital Loss carries over to the next year.

A Trading Loss is deducted from your income. Now if this trading loss is more than your income, does this also 

carry over?