So if I'm not mistaken, when declaring taxable amounts I could declare the sale's profit of a high performing share as a capital gain even if it's been held for less than 3 years. Then it's up to SARS to investigate if they want to disprove my claim and apply a marginal tax instead. Is that how it works?
Tax
Started by
joker
, Aug 21 2013 11:24 PM
66 replies to this topic
#62
pete512
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Posted 22 August 2013 - 12:38 PM
I have never been asked to provide trading history , so how does it then trigger SARS to query your reason for selling . It also works both ways so if you make a loss with a share you have had for less than 3 years then SARS will have to share that loss with you at your marginal rate which I'm sur ethey not to keen on
#63
ptomli
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Posted 22 August 2013 - 11:27 AM
Has anyone actually been challenged by SARS on the 3 year rule. Wonder if they even bother unless you are making millions
What do you mean?
Challenged by SARS for accounting a sale of equity held for more than three years as a capital gain? IIRC that's legislated, not something SARS can challenge.
If you mean SARS doing one thing or the other for a sale within three years, then I'm sure that comes up each year.
#64
pete512
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Posted 22 August 2013 - 11:18 AM
Has anyone actually been challenged by SARS on the 3 year rule. Wonder if they even bother unless you are making millions
#65
gamma
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Posted 22 August 2013 - 08:48 AM
Hi guys,
I've been looking into tax around stocks and I'm a little confused. There is captal gains tax and marginal tax. The former applies to investors, the latter apllies to traders. Nows there's a 3 year rule. If u hold onto a share for 3 yrs before selling you should qualify for capital gains tax which is much less severe. However there are exceptions. U can sell the share before 3 years and stil be considered an investor. This part confuses me. Can I sell my shares after six months and use that same money to buy a different set of stocks and still qualify for capital gains tax?
On a similar note, I've heard you should have 2 seperate accounts for investing and trading. Does this refer to bank acounts, or the actual trading platform account?
you don't have to have 2 accounts but its cleaner esp if you are very active in trading and investing.
with one account you simply need to justify each position on its merits
Do not try and bend the market. That's impossible. Instead... only try to realize the truth. Then you'll see, that it is not the market that bends, it is only yourself.
#66
ptomli
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Posted 22 August 2013 - 08:30 AM
After three years it's automatically CGT. Before three years it's entirely up to SARS to make a judgement. If you can convince them it's an investment action, not an income action, then you can get them to apply CGT.
#67
joker
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Posted 21 August 2013 - 11:24 PM
Hi guys,
I've been looking into tax around stocks and I'm a little confused. There is captal gains tax and marginal tax. The former applies to investors, the latter apllies to traders. Nows there's a 3 year rule. If u hold onto a share for 3 yrs before selling you should qualify for capital gains tax which is much less severe. However there are exceptions. U can sell the share before 3 years and stil be considered an investor. This part confuses me. Can I sell my shares after six months and use that same money to buy a different set of stocks and still qualify for capital gains tax?
On a similar note, I've heard you should have 2 seperate accounts for investing and trading. Does this refer to bank acounts, or the actual trading platform account?
I've been looking into tax around stocks and I'm a little confused. There is captal gains tax and marginal tax. The former applies to investors, the latter apllies to traders. Nows there's a 3 year rule. If u hold onto a share for 3 yrs before selling you should qualify for capital gains tax which is much less severe. However there are exceptions. U can sell the share before 3 years and stil be considered an investor. This part confuses me. Can I sell my shares after six months and use that same money to buy a different set of stocks and still qualify for capital gains tax?
On a similar note, I've heard you should have 2 seperate accounts for investing and trading. Does this refer to bank acounts, or the actual trading platform account?
Edited by joker, 21 August 2013 - 11:29 PM.
