Maximising your dividend income
You could improve your return by selling the share instead of waiting for the dividend payout but there are caveats. I was recently asked an interesting question about dividends. The person concerned was curious as to whether from a tax and return perspective it is better to take the dividend itself, or sell the share […]
Don’t suffer the tax consequences of waived debt
Many natural persons or trust shareholders in companies are confronted with the unintended tax consequences of owing an amount on a loan account to the company in which they hold those shares. These tax consequences specifically relate to the “deemed dividend” which arises on interest-free loans (related to so-called “debit loans” in companies). In many cases, there is no intention to ever repay the […]
Clearing loan accounts through dividends
In terms of the Tax Administration Act, the South African Revenue Service (“SARS”) can issue, in response to an application, Binding Private Rulings (“BPR”) and clarifies how the Commissioner would interpret and apply the provisions of the tax laws relating to a specific proposed transaction. BPR 346 determines the income tax and dividends tax consequences of the redemption of intra-group loans […]