Herewith a brief overview of the tax implications.

INDIVIDUAL TAX

The maximum marginal rate for natural persons remains at 45% and is reached when taxable income exceeds R1,817,001 (previously R1,731,600).

The minimum tax rate remains at 18% on taxable income not exceeding R237,100 (previously R226,000).

The primary rebate for all natural persons has been increased to R17,235. The additional rebate for persons aged 65 years and older is increased to R9,444. Persons aged 75 and older are granted a further R3,145.

The tax-free portion of interest income remains at R23,800 for taxpayers under 65 years and R34,500 for persons aged 65 years and older.

The tax-free savings dispensation for other investments, including collective investment schemes, remains at R36,000 per tax year.

INDIVIDUAL TAX THRESHOLDS

Individuals will be liable for tax if their income exceeds:

Under 65 years: R 95,750 (previously R 91,250)
65 to 74 years: R148,217 (previously R141,250)
75 years and older: R165,689 (previously R157,900)

FOREIGN EMPLOYMENT INCOME

The exemption for foreign employment income of tax residents remains at R1,25 million, effective 1 March 2020.

DOMESTIC SOLAR PV PANELS TAX REBATE

A tax rebate is allowed to individuals of 25% of the cost of new or unused panels purchased and installed at a private residence from 1 March 2023 (this, however, excludes the cost of inverters and batteries). This rebate is capped at R15,000 per individual.

MEDICAL EXPENSES

Taxpayers may, in determining tax payable, deduct monthly contributions to medical schemes (a tax rebate to be known as a medical scheme fees tax credit) up to R364 for each of the taxpayers and the first dependant on the medical scheme and R246 for each additional dependant.
For an individual who is 65 and older, or if that person, his or her spouse, or child is a person with a disability, 33.3% of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year.

COMPANIES AND CLOSE CORPORATIONS

The rate of normal tax is 27% (for tax years commencing 1 April 2022, or put another way, ending on or after 31 March 2023).

The final withholding dividends tax remains at a flat rate of 20%.

TRUSTS

The flat rate remains at 45%, although distributions in the same tax year are taxed in the beneficiaries’ hands.

ESTATE DUTY AND DONATIONS TAX

The estate duty and donations tax rate remains at 20% for dutiable estate amounts of R30 million or less and increases to 25% for dutiable estate amounts over R30 million.

The estate duty abatement (exempt threshold) remains at R3,5 million per person, and a surviving spouse may also benefit automatically from any unused deduction in the first-dying spouse’s estate, i.e., the abatement remains a combined maximum of R7 million for the second-dying spouse.

There is a similar treatment of Donations Tax, namely 20% for donations of R30 million or less, which increases to 25% for donations over R30 million, being the cumulative value of all donations on or after 1 March 2018.

The first R100,000 of amounts donated in each tax year by a natural person remains exempt from donations tax. In addition, donations between spouses are fully exempt.

CAPITAL GAINS TAX (CGT)

The annual capital gain exclusion for individuals remains at R40,000.
The primary residence exclusion from capital gains tax remains at R2 million.
The effective rate of CGT is a maximum of 18% for individuals and 21,6% for companies.

FOREIGN INVESTMENTS

The offshore investment allowance remains at R10 million per adult person per calendar year. In addition, the R1 million individual single discretionary allowance remains.s.