How much of your stock market profits is SARS entitled to?

by , 06 January 2015

When you invest and trade on the stock market, your main objective is to make money.

But if you've done well, chances are all the profits aren't yours. You'll have to pay SARS its cut.

So how do you know when you have to declare your profits to SARS from your investments? And what are you liable to pay?

Read on to find out…


Your tax liability to SARS when you invest and trade


When it comes to completing you tax return, you have to declare your income.

Any profits you make from investing and trading in the stock market fall into this category.

The good news is if you’re still in a position, you don’t have to pay tax on any profits you’ve made on paper. But once you exit a position you may be liable to pay tax on the profits.

And depending on how you made your cash will determine what tax you pay.


Are you an investor or a trader, or both?


If you’re an investor and invest for the longer-term (holding positions for at least a year), chances are any gains you make SARS will class as capital gains.

In the current tax year, you don’t have to pay capital gains tax on any amount less than R30,000. But if your profits exceed that, as an individual you’ll have to pay 13.3% tax on any amount above that.

If you’re a trader or your investments are short-term in nature, you’ll be liable to pay income tax on any gains you make.

But don’t forget that you can offset any losses you’ve incurred. This may lower your tax liability or mean you don’t have to pay tax at all.

If you’re not sure, you’re best to speak to a tax consultant when you complete your tax return for the year.

So there you have it, how much of your stock market profits SARS is entitled to.

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