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The Income Tax Act further determines that income tax on capital gain
is payable on the amount by which the proceeds received or accrued
in respect of the sale exceed the base cost of that asset. This means
that your payment of tax on the full R3,500,000 is correct, as such
amount accrued to you by reason of the sale transaction.
In a recent Supreme Court of Appeal case, it was reaffirmed that the
gain does not need to be already received in order for a taxpayer to be
liable for income tax on capital gain, but that an amount accruing to a
taxpayer is sufficient to impose a tax liability on such person.

The fact that you did not receive the money, and that the sale was Commercial
cancelled three years after the year in which the tax was paid, appears
to have given rise to the problem of SARS being unable to re-open the
tax assessment for the 2013/2014 tax year as a result of prescription and
therefore unable to re-assess the capital gain for the sale transaction
and refund you the overpayment. But it is not necessarily all a loss.
Although it might not seem so, a capital loss is an asset to your company
as it will allow your company to set-off future capital gains against such
loss. You can realise a future capital gain in your company to the full
value of your current capital loss before your company becomes liable
to pay any further income tax on the capital gain. A capital loss is also
capable of being carried over from one year to the next, and put you
in a position to turn your current loss into a future gain.

New FICA requirements for accountable
institutions

May 2017

“My business qualifies as an accountable institution under the
Financial Intelligence Centre Act. There has been a lot of talk
in the news about the new Amendment Act being signed but
not a lot of detail on how it will affect my business. Will it be
business as usual or are there changes I should be aware of?”

The Financial Intelligence Centre Act 38 of 2001 (“FICA”) was introduced
in South Africa to govern financial intelligence and to assist in the
combatting of financial crime. The recent Amendment Act to FICA is
intended to enhance and modernise our South African framework
in accordance with the latest approaches of the international
community. All entities classified as “accountable institutions” in terms
of FICA must comply with FICA, which includes the latest amendments
thereto.

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