Dear fellow taxpayer,

The market’s being good to investors at the moment. In the last six months, the JSE’s run up 44.23%, so anyone with stock market investments should be happy to see some gains (if not profits) again. The problem is, with profit comes more tax.

With the beating everyone took during the last 12 months, I don’t think it’s fair that SARS gets to eat away at your profits, so I called Matsika yesterday to vent. He let me yell into his ear for five minutes before he interrupted me, laughing. “I’ve got the perfect trick for you to lower your capital gains tax when you sell shares. It’s all got to do with the calculation of the base cost of the shares. Simply add all the allowable inclusions into your base cost calculations and bob’s your uncle, you’ve reduced your CGT liability.”

Specifically, add together:

• How much it cost to buy the shares;
• The securities transfer tax you paid when you bought the shares;
• The cost of any option you exercised in buying or selling the shares (except shares taxed under section 8A or 8C); and
• Your broker’s fees (whether to buy or sell the share).

Portfolio management fees don’t qualify as part of the base cost of a share. And remember, if you’re getting shares from your company, the base cost of those shares will be the market value of the shares.
Get this right and you’ll reduce your CGT liability.

Falling for it- hook, line and sinker!

Right, now that you know how to maximise your investment profits, let’s make sure you’re not losing money to scam artists and crooks. So, beware of the phishing email scam doing the rounds.

What’s phishing? Most commonly, phishing is the practice of sending scam emails to individuals with the aim of getting their banking details or money. These emails look and feel like the real thing, complete with real-looking letterheads, which makes them tough to spot. Usually, a scam email will ask you to fill in your banking details somewhere, or to make a cash transfer into an account, to get a reward of some sort.

This week, some taxpayers received these emails “from SARS”. The email asked them to submit their banking details to get tax refunds. Those who didn’t know that SARS doesn’t ask for your details via email have become victims to this fraud. Remember, SARS will send you a letter in the post, when they need you to update your details, or when they’ve given you a refund. It will NEVER ask for this information via email. It will NEVER communicate with you via email AT ALL. If a refund is due to you, SARS will AUTOMATICALLY pay it into your bank account.

To elude these criminals, don’t respond to emails that ask you for your banking details or your money! When in doubt about the credibility of an email, call SARS.

Until next time,

Fulvia Becatti
Managing Editor
Practical Tax Hanbook and Practical Vat Handbook