Budget Speech Summary

Herewith a short summary of some of the tax proposals announced by the Minister of Finance, Nhlanhla Nene in his budget on 25/02/2015.   Personal tax: Individuals (See Schedule A)

       
  • Lowest tax rate of 18% applicable on taxable income up to R181 900 (R174 550)
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  • Maximum marginal rate increased to 41% on taxable income above R701 300 (40% on R673 100)
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  • Rebate under 65 years of age – R13 257 (R12 726) 65 years and older – R20 664 (R19 836) 75 years and older – R23 130 (R22 203)
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  • Interest exemption under 65 years of age – R23 800 (unchanged) 65 years and older – R34 500 (unchanged)
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  • Tax threshold R73 650 (R70 700) 65 years and older – R114 800 (R110 200) 75 years and older – R128 500 (R123 350)
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  • Medical fund contributions qualify for medical tax credits per year of R3 240 (R3 084) per person for the first two members and R2 172 (R2 064) per person for each additional member.
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  • Tax brackets in respect of lump sum benefits on retirement are unchanged (Schedule B).

Transfer Duty Amended in respect of properties bought on or after 1 March 2015. ALL natural persons and legal entities: New – From 1 March 2015 R0 – R750 000: Nil R750 001 – R1 250 000: 3% above R750 000 R1 250 001 – R1 750 000: R15 000 + 6% above R1 250 000 R1 750 001 – R2 250 000: R45 000 + 8% above R1 750 000 Above R2 250 001: R85 000 + 11% above R2 250 000 Previous – Until 28 February 2015 R0 – R600 000: Nil R600 001 – R1 000 000: 3% above R600 000 R1 000 001 – R1 500 000: R12 000 + 5% above R1 000 000 Above R1 500 001: R37 000 + 8% above R1 500 000 Donations Tax (unchanged)

       
  • Exempt up to R100 000 p.a.
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  • Donations tax payable at 20% by donor

Estate Duty (unchanged)

       
  • Basic deduction: R3,5 million
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  • In case of a married couple, the survivor has an exemption of R7 million less so much of the exemption utilised by the first-dying
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  • Tax rate: 20%

Capital Gains Tax (unchanged) Capital gains tax inclusion rates are unchanged:

       
  • Individuals: 33.3%
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  • Companies and trusts: 66.6%

Exclusions for individuals are unchanged:

       
  • Annual exclusion: R30 000
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  • Exclusion on death: R300 000
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  • Primary residence: R2 000 000
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  • Small business exclusion [assets up to R10 million]: R1 800 000

VAT (unchanged)

       
  • Rate unchanged at 14%
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  • Compulsory VAT registration if turnover more than R1 million per year (unchanged)

Other rates

       
  • Tax rate for company unchanged at 28%
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  • Tax rate for trust increased to 41% (40%)
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  • Turnover tax for micro business reduced substantially (Schedule C)
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  • Tax rate for small businesses amended as per Schedule D
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  • Dividend tax unchanged at 15%

With kind regards, Pieter Steenkamp

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