Latest news with #R100
Daily Maverick
9 hours ago
- Business
- Daily Maverick
The Financial Wellness Coach: How to cut estate duty and avoid heavy tax
Although it may seem like a good idea to transfer assets before death to reduce estate duty, doing so can actually result in higher tax costs. Question: My father is a widower and has just been diagnosed with cancer. The prognosis is not good and I'm helping him to tidy up his affairs to make the inheritance process easier. I am his only child. His assets consist of a house worth R4-million and various share investments worth R8-million. To reduce his estate duty bill, we are thinking of transferring the house to his only grandchild while he is still alive. advertisement Don't want to see this? Remove ads Does this make sense? Are there any other factors we should consider? Answer: Although it may seem like a good idea to transfer assets before death to reduce estate duty, doing so can actually result in higher tax costs during your father's lifetime. This is because of: • Immediate payment of capital gains tax (CGT) If your father transfers the house to his grandchild now, he will trigger a CGT event. He will need to pay tax on the growth in value of the property from when he bought it until the date of transfer. This could be substantial, especially if the house has appreciated significantly. • Donations tax Donating the house (valued at R4-million) to the grandchild will also trigger donations tax at 20% on the value above the R100,000 annual exemption. This means that your father will have to pay donations tax of R780,000. • Transfer costs The transfer will also incur costs such as conveyancing attorney fees, deeds office charges and transfer duty. As you can see, this approach would result in a high immediate tax burden (CGT plus donations tax plus fees) without actually reducing the tax payable, as donations tax is charged at the same rate as estate duty (20%). Additionally, the value of these taxes is paid during your father's lifetime, thereby reducing the capital available for investment and growth. advertisement Don't want to see this? Remove ads Alternative strategy An alternative solution that is worth considering is the following: Your father's estate is worth R12-million. He will get the R7-million estate duty abatement. This means that R5-million of his estate would be dutiable, which, at a rate of 20%, means that he would be paying R1-million in estate duty. One of the few options is to make use of disallowed retirement contributions. In short, if you buy a retirement annuity (RA) that is worth more than the lesser of R350,000 or 27.5% of your taxable income, the excess contributions are classed as disallowed contributions. If you buy a living annuity with that money and your beneficiaries elect to receive the proceeds of the annuity when you die, this amount will not trigger estate duty. Consider this scenario Your father buys an RA for R5-million (which is above the allowable deduction threshold); The excess contributions are classified as disallowed for tax purposes; He then converts this RA into a living annuity; and If your child (his grandchild) is listed as the beneficiary of the living annuity and chooses to receive the benefit as an income stream, no estate duty will be payable on this amount upon your father's death. This will result in the following: A saving of R1-million in estate duty, as the living annuity falls outside the estate for estate duty purposes; A saving of R200,000 in executor fees, as the living annuity has a beneficiary and need not be dealt with by the executor; The income paid to your child will be taxable in their hands, but since they will probably have little to no income while still young, the tax will be minimal, if any; and This structure can fund education, living expenses or long-term income. This is a fantastic way for your father's legacy to live on. Although it is never nice to think about death, a bit of planning can make a material difference to the amount of money that leaks from an estate when there is a death. advertisement Don't want to see this? Remove ads advertisement Don't want to see this? Remove ads I would strongly recommend that you speak to a suitably qualified professional before implementing any of these ideas, because I'm only seeing part of your financial picture and there may be other factors that need to be taken into account. DM Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at Send your questions to [email protected]. This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
TimesLIVE
10 hours ago
- Business
- TimesLIVE
Just one Gupta property finds a buyer at Saxonwold auction
Furniture from two of the houses was sold as a separate lot per property. The loose assets of house No 5 were sold to an in-person bidder for R100,000, while the furniture of house No 7 went for R60,000. The furniture for house No 3 was not sold. Park Village Auctions disposal manager Graham van Niekerk described the outcome as 'exactly what we expected'. He said despite house No 3's rundown condition, it had more redevelopment potential. 'You can see for yourself the scope to upgrade it or start from scratch. The other two are very unique and difficult properties,' said Van Niekerk. He attributed the lack of interest in houses No 5 and No 7 to several factors: high municipal valuations, poor structural condition, restrictive zoning (residential 1) and the stigma associated with the Gupta name. Outside the compound, a small group of people protested, demanding justice and accountability for the family's alleged role in state capture. 'This is not the first time we have protested,' said Li Gula, from the Organisation Undoing Tax Abuse (Outa) 'We want the Guptas to come back and account. The NPA is moving far too slowly. The Zondo commission cost taxpayers millions and yet justice still drags on.' Lazarus said the auction was part of an effort by business rescue practitioners to open the process to public scrutiny. 'There is a stigma around these properties, but the most important thing is transparency. Everyone had the same opportunity to bid,' he said. Lazarus acknowledged that properties No 5 and 7 were always going to be tough sells. 'They are in serious disrepair and need major investment to restore. The business rescue team will now explore alternative methods to dispose of them, including closed tenders.' The auction may not have cleared all assets but it opened a rare public window into what remains of the once-powerful family's South African empire now reduced to crumbling mansions and unresolved questions.
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![[IN PICS] Only one property at Gupta brothers' Saxonwold compound auctioned off](/_next/image?url=https%3A%2F%2Fstatic-mobile-files.s3.eu-central-1.amazonaws.com%2Feyewn.png&w=48&q=75){kind=small}
Eyewitness News
12 hours ago
- Business
- Eyewitness News
[IN PICS] Only one property at Gupta brothers' Saxonwold compound auctioned off
But it was only the three-bedroom house with a municipal value of R5.5 million that was successfully auctioned. "Final time at R3.3 million," the auctioneer said. The furniture that was used by the Guptas in the two luxurious properties was sold for R100,000 and R65,000, respectively.
IOL News
16 hours ago
- IOL News
Two sentenced for leaking the 2020 matric mathematics exam paper
Two individuals face penalties after leaking a crucial 2020 matric mathematics exam, raising concerns about exam integrity in South Africa. Image: Armand Hough / Independent Newspapers Archives Two people were found guilty of leaking the 2020 matric mathematics exam paper. Themba Daniel Shikwambana, a 36-year-old, and Thobile Sweetbetter Duze 48-year-old, appeared in the Johannesburg Magistrate's Court on July 23. They pleaded guilty to stealing a matric exam question paper and were sentenced accordingly. Gauteng Hawks spokesperson Lieutenant Colonel Christopher Singo said that on November 16 2020, the Department of Basic Education received a tip-off about a possible leak of the matric Mathematics exam paper, which had allegedly been circulated via WhatsApp. 'The department was alerted via a WhatsApp photograph, which was later verified and confirmed to be a true copy of the 2020 Mathematics Paper 2 exam paper.' He stated that the initial investigation revealed that several learners in Limpopo and Gauteng had admitted to receiving the leaked exam paper via WhatsApp. The case was subsequently transferred to the Hawks' Serious Commercial Crime Investigation team at their Pretoria headquarters for a comprehensive investigation. Singo further revealed that following the leak, Shikwambana was located in Gauteng's Orange Farm, while Duze was arrested in 2021 in Port Shepstone, KwaZulu-Natal. 'On 25 November 2020, Shikwambana, who was working at a printing company in Johannesburg, where exam papers were printed, was traced and arrested in Gauteng, Orange Farm. 'Further investigation led to the arrest of Duze on 10 June 2021 in KwaZulu-Natal, Port Shepstone. The accused appeared in court on several occasions, culminating in their recent conviction,' he added. The court sentenced the duo to pay a R100 000 fine or serve twelve months in prison, with half of the fine (R50,000) or six months imprisonment suspended for five years, provided they are not found guilty of the same offence during that suspension period. The court further ruled that Shikwambana and Duze must repay the R50 000 fine in monthly instalments of R5 000, with the full amount due by April 2026. Singo also stated that the court handed down a three-year prison sentence to the accused, wholly suspended for five years, on the condition that they are not found guilty of a similar offence during that time. The Basic Education Department spokesperson, Elijah Mhlanga, responded to the news by welcoming the conclusion of the case and the guilty pleas. However, he expressed that the department would have preferred a stricter sentence given the sensitive nature of the examinations. 'We welcome the conclusion of the matter and the guilty plea. We would have preferred a harsher penalty owing to the sensitive nature of the examinations. 'We, however, appreciate the work done by The Hawks and that we hope this matter will serve as an example that we take seriously the security of examination question papers.' The 2020 exam scandal caused major disruption after the Physical Science Paper 2 was also leaked just hours before the exam. However, an investigation by the National Investigations Task Team confirmed that despite the leaks of both mathematics and physics papers, the integrity of the overall 2020 matric exams remained intact. Are exams an effective way to assess students' readiness for post-school life? Critics say that while exams play a role in assessing student learning, they are not sufficient on their own to determine readiness for post-school life. A combination of diverse assessment methods, including continuous assessment, practical assessments, and opportunities for students to showcase their skills and knowledge, is crucial for providing a more comprehensive and accurate evaluation of their preparedness for the challenges and opportunities that lie ahead. The Star [email protected]
The South African
a day ago
- Sport
- The South African
Orlando Pirates news: Mofokeng price tag, MTN8 fitness doubts
Orlando Pirates may be counting the cost of their European pre-season. Coach Abdeslam Ouaddou has hinted that several players are carrying knocks, just weeks out from the MTN8 Cup. Although he didn't reveal names, Ouaddou's vague injury update has sparked concern. 'The game is played by young men,' he told local media. 'Swelling and niggles are normal.' The injuries could prove disruptive, with Pirates set to face Polokwane City in the tournament's quarter-finals. The match will also be a test for new signings like Oswin Appollis and Tshepang Moremi, should they be fit to feature. The bigger distraction, however, remains the future of Relebohile Mofokeng. PSV are the latest club pushing hard to sign the Orlando Pirates wonderkid. And the numbers being discussed are staggering. 'The R100 million talk is misleading,' a source said. 'It was initially R120 million.' That hasn't stopped interest, nor has it silenced Mofokeng's father. Sechaba Mofokeng made it clear he doesn't want his son playing in South Africa next season. 'Spain, England, Netherlands — Rele can play anywhere. But not Saudi Arabia. He needs to experience UEFA football,' he said. Let us know by leaving a comment below or send a WhatsApp to 060 011 0211. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X, and Bluesky for the latest news.
