With the exception of the increased VAT rate from 1 April 2018, there were no major surprises, in my opinion. It’s a fairly stable, “safe” budget.  Points worth mentioning are listed below.

VAT:  Increase from 14% to 15%, effective 1 April 2018.

  • Estate duty:  Increase from 20% to 25% on estates over R30m (the 25% only applying to the amount in excess of R30m, the 1stR30m is still taxed at 20%).  If you’re on the Treoc Way, this will have zero impact on your affairs as your estate should be zero.
  • Donations tax: Increase from 20% to 25% on donations over R30m (the 25% only applying to the amount in excess of R30m, the 1st R30m is still taxed at 20%).
  • Transfer duty: Unchanged.
  • Dividends tax: Unchanged at 20%.
  • Company tax: Unchanged at 28%.
  • Trusts:  Unchanged at 45%.  However, as we all know, this is irrelevant as taxable profits are never left to be taxed in the trust when following the Treoc Way.
  • Individual tax rates:  No adjustments to the top four income tax brackets. Below inflation adjustments to the bottom three income tax brackets were proposed.  The rates remain unchanged.
  • Capital Gains Tax:  Unchanged – the inclusion rate remains at 40% for natural persons and 80% for companies and trusts.  Therefore, the maximum CGT rates are:
    • Natural persons and special trusts:  18%
    • Companies:                                   22.4%
    • Other Trusts:                                 36%
  • Official rate of interest:  Current repo rate plus 1% (7.75%)

For your information, find the following tax tables below

TABLE 1 – INDIVIDUALS AND SPECIAL TRUSTS

  Taxable Income (R)   Rate of tax
  R0 – R195 850   18% of taxable income
  R195 851 – R305 850   35 253 + 26% of taxable income above R195 850
  R305 851 – R423 300   63 853 + 31% of taxable income above R305 850
  R423 301 – R555 600   100 263 + 36% of taxable income above R423 300
  R555 601 – R708 310   147 891 + 39% of taxable income above R555 600
  R708 311 – R1 500 000   207 448 + 41% of taxable income above R708 310
  R1 500 001 and above   532 041 + 45% of taxable income above R1 500 000

 

TABLE 2 – TRANSFER DUTY RATES

  Value of property (R)   Rate of tax
  R0 – R900 000   0%
  R900 001 – R1 250 000   3% on the value above R900 000 and up to R1 250 000
  R1 250 001 – R1 750 000   R10 500 + 6% on the value above R1 250 000 and up to R1 750 000
  R1 750 001 – R2 250 000   R40 500 + 8% on the value above R1 750 000 and up to R2 250 000
  R2 250 001 – R10 000 000   R80 500 + 11% on the value above R2 250 000 and up to R10 000 000
  R10 000 001 and above   R933 000 + 13% on the value above R10 000 000

 

Should you wish to consult with our experts on how to best manage the new budget developments and its impact on your affairs, please contact  here. 

Source: http://treocmedia.com/article/658/Budget-2018/29-Commentary