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Taxable Benefits (7th schedule (Free/cheap accommodation, Company cars,…
Taxable Benefits
7th schedule
Free/cheap accommodation
Company cars
Use of assets
Acquisition of asset < cost
free/cheap accommodation
Private use of asset
Low/no interest loans
Housing subsidies
Payment of employee debt
Medical Aid/retirement fun contr.
S8B: Taxation of amounts derived from employee share plan (disposal)
GI = gain on disposal w/i 5years
80% employees entitled to scheme
Entitled to all dividends & voting rights
No CGT if ee ceases to be resident w/in 5years
MV < R50k
Exempt & deduction
S8C: Taxation of ee on vesting of equity instruments
Acquired by virtue of employment
Include in income
Any amount iro restricted instrument
Not return of capital
Not a (foreign) dividend
Not gain/loss ito instrument
Gain/loss recognised
Receipt less consideration
On disposal to er ito restrictions
Option exercised
Instrument converted to share
MV less consideration
When restrictions lifted ( vested right)
Does not apply to equity instrument ito S8B
#
Deemed to vest
Date of acq of unrestricted instrument
Date all restrictions cease
Disposal not at arm's length
Gain/loss deemed to be taxpayer's (not new owner)
Subject to donations tax (MV - consideration)
s10(1)(nD): Exemption
Residential Accommodation
Cash equiv = [(A-B) x C/100 x D/12] - consideration
Employer owns accommodation
No pre-emptive right to acquire
A - Remuneration Proxy
B - R75750
C -- 17 unless> 4 rooms
D - months during current YoA ee entitled to occupation
Employer not owner, rents at arm from non-connected
Lower of formula/expenditure
Holiday accommodation
Use highest rental value for multiple places
Rental deemed nil if ee away from usual residence
No rental value if non-resident
EE lets vehicle too ER
Rental/expenditure by ER = allowance to EE