DO YOUR LOVED ONES KNOW WHERE YOUR WILL IS?

This is such an important question to ask, as most people that have drafted a will believe that having drawn up a will is enough.

Unfortunately, this is not the case and it is critical that you and your loved ones know exactly where your most recent will is. The reason for this is that there is presumption in law that states that if the testator/testatrix has a valid will that cannot be located after death, that the testator/testatrix has destroyed his will with the intention that his estate should be wound up in terms of the Law of Intestate Succession.

This simply means that some people may end up as beneficiaries in your estate that may not have been your intention and this may be against your ‘will’.

Why is it so important to have a well drafted Will?

A large part of your life has been spent working and accumulating assets and this has probably taken place over a long time. Most people have very specific ideas as to what should happen to their assets in the event of their death. It is important that your intentions are complied with after your death and that the appointed executor correctly interprets your intentions and all assets are dealt with. What if someone you have nominated as a beneficiary dies before you do and your will does not make provision for substitute heirs?

In the instances listed above, the executor will either have to approach the High Court for guidance (these costs will be paid for from your estate) or the particular assets will be dealt with in terms of the Law of Intestate Succession.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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TRUSTS EN ARTIKEL 7C VAN DIE INKOMSTEBELASTINGWET, WET 58 VAN 1962

Van ons kliënte wat inter vivos trusts opgerig het, oorweeg dit om die trusts te ontbind vanweë die belasting- en administratiewe las wat veral die laaste tyd op trusts afgedwing word. Dit is egter nie ‘n besluit wat ligtelik geneem behoort te word nie.

Waar ‘n trust vir spesiale en/of spesifieke redes opgerig is en dit korrek aangewend word, behoort daar geen rede te wees om die trust te ontbind nie. ‘n Goed gestruktureerde trust is buigsaam en kan by veranderde omstandighede aanpas, hetsy met betrekking tot persoonlike omstandighede of met betrekking tot wysiging van wetgewing.

Kortliks: in ‘n diskresionêre trust vorm die bates nie deel van die persoonlike boedel van die oprigter, begunstigde of trustee nie en bied die trust dus beskerming teen byvoorbeeld insolvensie, besigheids- en ander skuldeisers, huwelike en egskeidings. Finansiële bestuur kan deur die trustees toegepas word as deel van die versorging van ‘n begunstigde, wie se boedel andersins onder kuratele geplaas moes word.

Vir persoonlike beplanningsdoeleindes, kan daar behoorlik na gades, kinders en kleinkinders omgesien word; daar is kontinuïteit na afsterwe van die betrokkenes en boedeladministrasiekoste is minder. Benewens dit, word erfporsies nie deur die onmiddellike, direkte betaling van boedel- en kapitaalwinsbelasting verminder nie. Groei van die bates vind in die trust plaas en die trust kan onbeperk, ter beskerming van begunstigdes en bates, voortduur.

Dit is nie noodwendig raadsaam, óf die beste besluit, om ‘n trust, wat ‘n geruime tyd gelede reeds opgerig is, teen koste geadministreer is en oor bates beskik waar daar groot kapitaalwinsbelasting implikasies is, te ontbind nie, al was die enigste doel vir oprigting van die trust boedelbeplanning met spesifieke verwysing na belasting. Ons sou voorstel dat die koste implikasies met ontbinding van die trust, asook die betrokkenes se persoonlike lewens-omstandighede en persoonlike finansiële- en belastingsituasies, oorweeg word. ‘n Gedeeltelike verandering in die tipe trustbates wat behou word, is dalk meer haalbaar, so ook ‘n oorweging van alle (dan tersaaklike) faktore in die tipe bates wat in die toekoms deur die trust aangekoop en/of aanvaar word, byvoorbeeld groeibates.

Die Davis-belastingkomitee (hierna genoem die DBK) het in die tweede interimverslag oor boedelbelasting, voorgestel dat die deurvloei-beginsel gestaak moet word en dat inkomste en kapitaalwins in die trust belas moet word. Vir nou kan hierdie “geleibuisbeginsel” egter steeds aanwending vind, tot voordeel van die trust, afhangend natuurlik van die betrokkenes se persoonlike belastingsituasie.

Artikel 7C van die Wet op Inkomstebelasting, Wet 58 van 1962, is vanaf 1 Maart 2017 van toepassing waar ‘n natuurlike persoon of ‘n maatskappy (wat ‘n verbonde persoon aan daardie natuurlike persoon is) ‘n lening aan die trust toestaan en geen of ‘n lae rentekoers hef (d.i., minder as die amptelike rentekoers: tans 8%), aangesien die Suid-Afrikaanse Inkomstediens in so ‘n geval ‘n bedrag gelykstaande aan die verskil tussen die amptelike rentekoers en die rente wat gehef word as ‘n geagte skenking van die lener aan die trust beskou. Die leninggewer is dus voortdurend en jaarliks vir skenkingsbelasting (tans 20%) op daardie geagte skenking aanspreeklik.

Artikel 7C is van toepassing op sodanige lenings wat reeds op 1 Maart 2017 bestaan of wat daarna aangegaan word. Die rente word reeds vanaf 1 Maart 2017 bereken, maar die datum van die skenking word as 28 Februarie 2018 geag.

Die toepassing van Artikel 7C is, met ingang 19 Julie 2017, uitgebrei om lenings aan maatskappye wat aan trusts verbonde is, in te sluit. Dit sluit ook maatskappye in wat nie in ‘n trust geregistreer is nie, maar waar die aandeelhouers, as individue, trustbegunstigdes is. Laasgenoemde toepassing word tans bevraagteken.

‘n Verbonde persoon is enige persoon wat self of saam met ‘n persoon verbonde aan homself/ haarself, direk of indirek minstens 20% van die maatskappy se aandeelkapitaal of stemreg hou.

Die “Draft Taxation Laws Amendment Bill, 2017” bevat nou subartikel (1A), wat verhoed dat ‘n leninggewer ‘n ooreenkoms met ‘n ander begunstigde van die trust aangaan waarvolgens die leningsrekening aan daardie begunstigde oorgedra word.

Elke individu kan tans jaarliks, belastingvry, ‘n bedrag van R100 000 aan ‘n derde party skenk (skenkings tussen gades is egter in totaliteit vrygestel). Dit het die praktiese gevolg dat, indien die lener nie reeds die jaarlikse vrystelling elders aanwend nie, hy/sy die vrystelling kan gebruik om die 8% rente op ‘n leningsrekening tot en met R1 250 000 te betaal (R1 250 000 x 8% = R100 000).

‘n Ongelukkige gevolg hiervan is dat waar leninggewers die jaarlikse vrystelling moet gebruik om nie skenkingsbelasting te betaal nie, die vrystelling nie meer beskikbaar is om die leningsrekening te verminder ten einde hul persoonlike boedels te verklein nie.

Artikel 7C sal nie op die volgende van toepassing wees nie:

  1. Lenings aan spesifieke welsynsorganisasies gemaak
  2. Lenings in “bewind” trusts, dit is, waar die eienaarskap van die bates in die begunstigde vestig
  3. Lenings aan spesiale trusts wat vir gestremde persone opgerig is
  4. Lenings aan die trust gemaak vir die doel om kapitaal te verskaf (in totaliteit of gedeeltelik) vir die aankoop van ‘n onroerende eiendom wat deur die leninggewer of sy gade as primêre woning gebruik word, mits die woning deurentyd die jaar van aanslag aldus gebruik word
  5. Lenings aan buitelandse trusts (waar Artikel 31 op die lening van toepassing is)
  6. Lenings aan trusts wat aan spesifieke Sharia-ooreenkomste onderworpe is 3
  7. Lenings deur ‘n maatskappy wat geag word as ‘n dividend van die maatskappy aan die trust dienooreenkomstig Artikel 64E (4)
  8. Lenings aan trusts wat gebruik word om werknemer-aandeelskemas tot stand te bring
  9. Lenings in diskresionêre trusts wat ontstaan weens die uitkering van inkomste aan begunstigdes onderworpe aan sekere voorwaardes (sien hierna).

Daar is tans meningsverskille oor die toepassing en aanwending van Artikel 7C op uitkerings aan begunstigdes in diskresionêre trusts.

Een mening is dat waar ‘n bedrag (d.i., ‘n inkomste-of kapitale uitkering) in ‘n begunstigde vestig wat vir die voordeel van daardie begunstigde gebruik of geadministreer word, sonder dat die bedrag aan die begunstigde uitgekeer of betaal word, daardie bedrag nie as ‘n lening waarop Artikel 7C van toepassing is, beskou word nie, mits die trustakte bepaal dat die bedrag nie aan die begunstigde mag uitkeer nie (byvoorbeeld, waar die begunstigde eers ‘n spesifieke ouderdom moet bereik) of mits die trustees, ingevolge die trustakte, die uitsluitlike diskresie aangaande die tydperk en omvang van die uitkering aan die begunstigde van sodanige gevestigde bedrag het.

Die bedrag sal egter wel aan die bepalings van Artikel 7C onderworpe wees, indien die begunstigde die keuse tot uitkering gemaak het of ‘n versoek gerig het dat die trustees nie die bedrag aan hom/haar uitkeer of betaal wanneer hy/sy daarop geregtig raak nie en die trustees daartoe instem of in gevalle waar die begunstigde ‘n ooreenkoms met die trustees aangaan in terme waarvan die bedrag in die trust bly.

‘n Ander mening is dat Artikel 7C wel van toepassing is in al die bogenoemde gevalle.

Daar word voorgestel dat leningsrekeninge waarop daar tans geen rente betaal word nie (of rente onder 8% betaal word), saam met die trust se rekenkundige beampte nagegaan word om te bepaal of Artikel 7C op die totale leningsrekening van toepassing is. Die leningsrekening behoort ontleed te word om te sien of daar enige uitsluitings, byvoorbeeld aankoop van die primêre woning en uitkerings, geld. Die grootte van die leningsrekening, asook die persoonlike belasting-verpligtinge van die leninggewer, moet oorweeg word, teenoor moontlike stappe soos ‘n (gedeeltelike) terugbetaling van die lening (waar daar byvoorbeeld kontant beskikbaar is en dit nie nodig is om bates, waarop kapitaalwinsbelasting betaal moet word, te gelde te maak nie). Die betaling van rente deur die trust aan die leninggewer (inaggenome die trust se inkomste-generende bates en die leninggewer se belasbare inkomste), asook ‘n wysiging aan die trustakte om vir veranderde wetgewing voorsiening te maak.

Weereens, bovermelde stappe moet oorweeg word met inagneming van elke betrokkene se persoonlike finansiële- en boedelbeplanning-situasie, asook beskerming van die begunstigdes en bates in die trust.

PSG Wealth

2017: Week 15 PRETORIA-OOS Weeklikse nuusbrief

Hierdie artikel is algemene inligtingsblad en moet nie as professionele advies beskou word nie. Geen verantwoordelikheid word aanvaar vir enige foute, verlies of skade wat ondervind word as gevolg van die gebruik van enige inligting vervat in hierdie artikel nie. Kontak altyd finansiële raadgewer vir spesifieke en gedetailleerde advies. (E&OE)

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IMPORTANT SARS DATES

There appears to be an increased focus recently by SARS in relation to tax compliance. We therefore want to highlight the below important dates again to our clients to ensure that they are always fully tax compliant. Non-compliance may lead to penalties being imposed against defaulting taxpayers, but also has wider potential implications. This includes that taxpayers may be unable to apply for a tax clearance certificate, or that SARS may be disinclined to favourably consider a request for the suspension of payment of an alleged tax debt while the taxpayer is engaged in a tax dispute with SARS.

VAT:

VAT registered businesses also registered on eFiling are required to file their periodic VAT returns on the last business day of the month following the end of the relevant VAT period. Payment is due by the same day if made by EFT or through the eFiling portal.

Where manual returns are filed, payment and filing is required to be made by the 25th of the month following the VAT period.

PAYE:

Businesses with employees (and from whose salaries PAYE is being deducted) is required to file the relevant EMP201 return by the 7th (or the last business day before the 7th if the 7th falls on a public holiday or weekend) of the month following the month in which the PAYE was deducted. The return must be accompanied by the relevant payment of PAYE too (i.e. on the same date).

Every employer who is registered for PAYE (and or UIF and/or SDL) is further also required to submit an EMP501 form by 31 October 2017, which essentially comprises an interim reconciliation of attendant employees related taxes and levies.

Dividends tax:

Dividends tax returns are required to be filed by the end of the following month after the relevant dividend declaration or receipt has taken place, and payment (if applicable) is required to accompany that return on the same date.

Provisional tax returns:

For those taxpayers who are also provisional taxpayers, provisional tax returns are due after the first 6 months of the relevant year of assessment has passed, and again on the last day of that tax year. Payment is required to be made by the same dates (if applicable). While a third payment of provisional tax is not required, this may be made within 6 months after the end of the tax year (7 months, if a the yearend falls on February) to avoid interest being levied on the underestimation of provisional tax, if it transpires to be the case.

Annual income tax returns:

We again wish to remind our (non-corporate) clients that annual income tax returns for non-provisional taxpayer individuals are due by 24 November 2017, while provisional taxpayers are required to submit their annual returns by 31 January 2018.

Companies are required to submit their annual income tax returns within 12 months after the end of the end of the relevant year of assessment.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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NEW CODE EXTENDS ACCOUNTANTS’ ETHICAL OBLIGATIONS

A professional accountant’s obligation to report non-compliance with laws and regulations has become more stringent, thanks to a new section to the International Ethics Standards Board for Accountants’ code.

Non-compliance goes far beyond reportable irregularities, and includes non-actual or suspected non-compliance with data protection, securities trading, terrorist financing and environmental protection.

Section 360 in the code of ethics guides accountants to act in the public’s interest when they become aware, or suspect a Noclar (non-compliance with laws and regulations).

Roles and responsibilities

The code states that a distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest (section 100.1 of the IESBA).

When responding to a Noclar, the professional accountant is required to comply with the fundamental principles of integrity, objectivity, professional competence and due care and professional behaviour.

Once they become aware non-compliance, they have to report it to their direct superior, and if they are the most senior person they have to consult with the board of directors or anybody who is involved in corporate governance in the organisation.

The responsible people must be allowed time to rectify, remediate or mitigate the consequences of the identified or suspected non-compliance, provided there is no urgency in the matter.

South African Institute of Professional Accountants (Saipa) advises accountants to follow the internal route first. If they feel there is insufficient action to rectify the non-compliance, they can approach the regional forums and their professional bodies. If they are still dissatisfied with the recourse taken, they should consult legal counsel.

The code acknowledges that a senior professional accountant is expected to apply knowledge, professional judgment and expertise. However, he is not expected to have a level of understanding of laws and regulations beyond that which is required for the professional accountant’s role within the employing organisation.

The new section provides accountants with an override to the principle of confidentiality when reporting the non-compliance is in the best interest of the public. Once they have taken appropriate action, they must feel comfortable that the non-compliance has been fully dealt with and remember to document everything.

Dealing with threats and intimidation

Professional accountants need to maintain their independence and objectivity, and not succumb to intimidation or threats when they encounter and report non-compliance.

South African legislation supports this professional duty in the form of the Protected Disclosures Act.

The code states that where it is not possible to reduce the threat to an acceptable level, a professional accountant shall refuse to remain associated with information that is considered misleading or may cancel their mandate to ensure that the code is upheld.

The letter of engagement should reflect clearly that the client’s information will be held confidential, but if there is a legal or professional duty to disclose non-compliance the professional accountant will not hesitate to do so. This sets the ground rules for the client to understand that the professional accountant will not tolerate non-compliance if it impacts on the public’s best interest. The accountant has a trained eye, and can determine if something seems untoward.

Meticulous record-keeping

It is critical for the professional accountant to meticulously document what he has done to address the non-compliance. This will act as proof that he adhered to the requirements and responsibilities set out in the new section of the code.

It is advisable to document the nature of the matter, the results of discussions with a superior or, and where applicable, those charged with governance.

It is important to document the response of the accountant’s superior, the courses of action taken by the professional accountant and the judgments made and the decisions that were taken.

[12 Sep 2017 11:04]

About the author2

Ragiema Thokan-Mahomed is the legal, ethics and compliance executive, South African Institute of Professional Accountants (Saipa)

biz

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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WHAT IS EMPLOYEE ENGAGEMENT?

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What makes one company or firm more successful than another? Better products, services, strategies, technologies or, perhaps, a better cost structure? Certainly, all of these contribute to superior performance, but all of them can be copied over time. The one thing that creates sustainable competitive advantage – and therefore ROI, company value and long-term strength – is the workforce, the people who are the company. And when it comes to people, research has shown, time and again, that employees who are engaged significantly outperform work groups that are not engaged. In the fight for competitive advantage where employees are the differentiator, engaged employees are the ultimate goal.

Employee engagement can be defined as:

“The commitment to and passion for one’s work and role within a company. Engagement, as opposed to satisfaction, translates directly into discretionary effort-the willingness to do more than only meet job requirements and customer needs.”

“Employee engagement is the emotional commitment the employee has to the organisation, something or someone in their organisation and how hard they work and how long they stay as a result of that commitment.”

Employee engagement is the emotional connection or extent to which employees are motivated to contribute to business success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of stated business goals.

An engaged workforce can have a significant effect on financial and operational results and in most cases without an engaged workforce, customer relation efforts will flounder. Businesses with highly engaged employees see higher customer satisfaction, have lower turnover rates, and outperform in terms of customer relations impact and ROI, than businesses with lower levels of employee engagement. One of the most interesting aspects of employee engagement is that it can serve as a barometer for the health of the company at large.

“Companies that engage and empower their workforce are better positioned to anticipate and adapt to changing market conditions.”

A company’s engagement efforts are a tangible manifestation of its company culture and if that culture is one that is defensive, unbalanced, or inflexible, it spells long-term doom. Importantly, as cycle rates of change continue to become shorter and shorter, the ability to adapt, innovate, and continually improve is crucial.

“To win in the marketplace you must first win in the workplace.” Employee engagement is the key to activating a high performing workforce.

The most recent survey results indicate that:

  • Only 29 percent of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company. People that are actively engaged help move the organisation forward.
  • 54 percent of employees are not engaged. These employees have essentially “checked out,” sleepwalking through their workday and putting time – but not passion – into their work. These people embody what Jack Welch said several years ago. To paraphrase him: “Never mistake activity for accomplishment.”
  • 17 percent of employees are actively disengaged. These employees are busy acting out their unhappiness, undermining what their engaged co-workers are trying to accomplish.
  • Employees most committed to their organisations put in 57 percent more effort on the job-and are 87 percent less likely to resign-than employees who consider themselves disengaged.

http://succeedgroup.co.za/2017/08/02/what-is-employee-engagement/#.WafEJea7qM9

Ben vd Westhuyzen
Succeed Group Strategic Marketing Consultants

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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BEWARE OF CAPITAL GAINS TAX WHEN YOU EMIGRATE

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While many people immigrate to South Africa, we also see many of our clients emigrating from South Africa. And while formal migration-status is not necessarily linked to tax residency, the time of tax migration often coincides with formal emigration linked to passport or visum status. Many are surprised to learn (often after the fact) that emigration for tax residency purposes gives rise to tax consequences in South Africa, and specifically to capital gains tax (“CGT”) consequences in the form of so-called “exit charges”.

In essence, section 9H of the Income Tax Act, 58 of 1962, determines that when a person ceases to be tax resident in South Africa, that person is deemed to have disposed of all his or her assets on the day that the individual emigrates for income tax purposes. In other words, in calculating their income tax exposure, individuals emigrating for tax purposes are regarded as having sold all of their assets at market value on the day before that on which they leave the country. As a result, a capital gain is realised on this deemed disposal that is subject to CGT at the prevailing tax rates. Currently, 40% of capital gains so realised by individuals are included in their annual taxable income, which amount may be subject to tax at rates of as high as 45%.

The policy justification for taxing individuals upon emigration is that taxes are to be levied on all capital growth achieved on assets owned by South African residents while they were tax resident. Once an individual will have emigrated, limited mechanisms would exist whereby capital gains may only be realised upon eventual actual sale of assets subsequently once the individuals are no longer tax resident in South Africa. (It is for this reason that South African immovable property is excluded from the “exit charges” regime; section 35A of the Income Tax Act provides for a withholding tax mechanism whereby CGT may be recovered from non-residents when they sell South African immovable property.)

While one may have sympathy for the policy justification for the levying of “exit charges”, it must be recognised that any deemed disposal of assets necessarily creates a cash flow conundrum for the individuals affected, quite often proving prohibitive for wealthy individuals seeking to emigrate. It is quite possible that assets of individuals emigrating may consist mainly of illiquid assets such as share investments. Upon emigration, these very assets may need to be actually disposed of in order to raise sufficient cash resources to be able to pay the resultant CGT that would have been payable on a deemed disposal of those assets at emigration.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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HOW FINANCIAL STATEMENT AUDITS DELIVER KEY BUSINESS INSIGHTS

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Financial statement audits are not just a compliance exercise, but also an opportunity to gain knowledge that can generate positive business results.

In many cases, though, companies are not taking full advantage of the insights that audits provide, a recent survey of 300 executives and 100 audit committee members by Deloitte’s U.S. audit practice revealed. According to the survey report, which was published in March:

  • More than three-fourths (79%) of executives and 91% of audit committee members say financial statement audits identify opportunities to improve business performance.
  • Almost half (46%) of executives and even more audit committee members (62%) say it’s at least somewhat likely that they would have missed important insights if the audit had not occurred.
  • Companies that regularly capitalize on information received from the audit are more likely to have achieved growth over the past three to five years that survey respondents consider “good” or “great.”

“Obviously, quality is the foundation here. We’ve always got to do a good, quality audit to start with,” said Adam Weissenberg, CPA, the national managing audit partner­-Clients & Industries for Deloitte & Touche LLP. “If we’re also providing insights and using that as a way to help the company know about some things they didn’t know about, that should be a valuable piece of the audit, and our client would value that.”

Through audits, companies may learn new information about their industry and market, discover shortcomings in processes and policies, and identify inefficiencies and risks. Increased use of data analytics is helping auditors look at large pools of data in a variety of areas to find information that could be helpful to clients.

Whether it’s journal-entry testing, analyzing contents of many leases across a company, or gleaning information from multiple contracts, data analytics is giving auditors the ability to find anomalies and discover inefficiencies that might have remained hidden in the past. These insights can provide important information for audit clients to act on.

Nonetheless, financial statement audits often represent a missed opportunity for companies. More than one out of every three companies (35%) rarely or never uses the information received from their financial statement audits to improve their business, according to the Deloitte survey. About half of executives (45%) and audit committee members (48%) whose companies don’t always use information from their audits do not have processes in place to make use of the insights that can be taken from an audit.

Weissenberg suggested that auditors, management, and audit committees can use the following tactics to make sure the client derives maximum value from the audit:

  • Communicate. Management, audit committees, and auditors benefit from communicating frequently to make sure the company is aware of and taking advantage of the insights that auditors discover. By following up and checking in with management and the audit committee, auditors can make sure that their insights have been understood.
  • Train auditors on judgment and communication. “We have to continue to work on [developing] the skills in our teams so that they can deliver on this, they have the ability to communicate effectively, they have the ability to take all these analytics and innovation that we’ve done and discern from that what kind of information is important to share with the audit committees,” Weissenberg said.

The survey offers good news for those who continuously strive to make the quality of audits as high as possible, as 83% of executives and 83% of audit committee members rated the reliability of information provided during an audit as good, very good, or excellent.

“There’s an inherent trust that the auditors are doing their job,” Weissenberg said, “and that the auditors are doing a good, quality audit, and that audit committees would look at us as an independent source in doing what we’re supposed to do.”

By Ken Tysiac (JofA editorial director)
June 1, 2017

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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CREATING A WILL: A FEW THINGS TO CONSIDER

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Talking about a last will and testament sometimes feels like giving health or dental advice.

People listen to your advice and suggestions with the kind of guilty unease of someone who is listening to the dentist talk about the necessity to floss regularly. You know that the advice is important, but you feel like it is something you can worry about later.

But just imagine the implications on your spouse or living partner if you leave him or her behind with no will. Apart from dealing with the grief of having lost a beloved, the person has to deal with hordes of unexpected claims and requests from anyone and everyone that you owe money to or have done business with.

The implications can be even more dire. Consider a recent case of a couple who passed away in two separate incidents, only days apart. Without a will, the state decides what happens with their assets and, importantly, with their children.

If you pass away without a will, not only will the state handle your affairs, but your spouse may lose out on unclaimed insurances and benefits that he or she has no idea about. Leaving your final affairs to the state will also incur additional costs that could have been avoided by giving clear instructions in a will.

These should be kept up to date and should be revised at least once a year.

Apart from ensuring that your next of kin get the best possible assistance and all the assets due to them, creating and maintaining a will has the additional benefit of forcing you and your financial advisor to review your affairs and to make sure that it serves your best interests.

Reviewing your will before you leave on holiday, for instance, may give you new ideas as to how best to invest or spend your money or it may highlight some preferences or ideas that you had in the past and that you, in retrospect, may not agree with anymore.

While creating your will, you should also consider filling in an Estate Directory. This directory is a comprehensive catalogue of every part of your life, including items often not thought about. Think about any club memberships, special friendships and even social media accounts that would need to be notified or closed if you pass away.

Wouter Fourie  /  26 February
Ascor®

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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GONE ARE THE DAYS OF TAX-FREE SALARIES ABROAD

Blog images-01-04Many South African taxpayers earning a salary abroad have for many years been able to benefit from so-called “double non-taxation”. This would be the case where salaries are earned in countries where the employer country would not tax salaries earned in that country, and where a domestic South African income tax exemption would also be available to such South African employees. The UAE for example is renowned therefore that it levies very little, if any, taxes on non-resident employees employed in that jurisdiction. This regime interacts quite well with the South African exemption from income tax provided to South African employees working abroad and in terms of which South Africa would in many cases also not levy income tax on salaries so earned abroad. In other words, a salary earned abroad may potentially not be taxed in either the country of source or residence (i.e. South Africa).

In terms of section 10(1)(o)(ii) of the Income Tax Act[1] salaries earned abroad would be exempt from South African income tax if the salary is earned for services rendered outside of South Africa, and the employee would be absent from South Africa for at least 183 days in a tax year, of which at least 60 are consecutive.

In the annual national budget speech earlier this year, Government warned of its intention to withdraw relief for South African individuals working abroad and effectively achieving double “non-taxation” on salaries so earned. This threat has now been borne out by the proposed withdrawal of the exemption in section 10(1)(o)(ii) of the Income Tax Act, proposed in terms of the draft Taxation Laws Amendment Bill published on 19 July 2017. As is explained by the draft Explanatory Memorandum to the Bill,

“It has come to Government’s attention that the current exemption creates opportunities for double non-taxation in cases where the foreign host country does not impose income tax on the employment income or taxes on employment income are imposed at a significantly reduced rate.”

The draft Bill proposes that section 10(1)(o)(ii) be deleted effectively for tax years commencing on or after 1 March 2019. This would effectively mean that South African residents will be taxable in South Africa on salaries earned abroad to the extent that the source country does not levy tax on the income so earned. To the extent however that income is taxed abroad too, South Africa should grant a credit against taxes payable here in terms of either an applicable double tax agreement or the provisions of section 6quat of the Income Tax Act.

[1] 58 of 1962

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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FIVE TIPS FOR MANAGING YOUR SMALL BUSINESS PAYROLL

Blog images-01-03Payroll is typically the number one concern for many small business owners worried about getting it right. But it needn’t be difficult – here are 5 top tips to make payroll easier.

  1. Know your big deadlines

Dealing with accounting deadlines and employee returns is much less stressful when you know what you need to action well in advance. Make sure you have a good system in place that alerts you to important dates and if you need to do anything. Working ahead gives you time to sort out any concerns or problems.

  1. Invest in a payroll software

Payroll systems such as Sage Instant Payroll or Sage One Payroll will automate the whole process for you, taking care of things like NI and tax calculations, generating payslips for employees, keeping up with legislation and providing information for end of year tax returns.

  1. Keep up with payroll legislation

Changes in regulation may affect how you need to run your payroll, so it pays to keep abreast of major new laws. Benefits and tax change frequently and while you don’t necessarily need to know all the details, it’s worth staying informed and getting advice when you’re not sure.

  1. Have a financial back-up plan

Keeping on top of payments is crucial in any growing business. Setting up a good credit control system, sending out invoices promptly and always chasing late payments firmly as soon as they become due will help avoid cash flow disruption.

  1. If all else fails… outsource

If managing payroll yourself is proving a real headache, consider outsourcing to a payroll company. They’re experts at what they do, and can save you the hassle of managing everything yourself and staying on top of regulations and paperwork.

Reference:

“8 Tips For Managing Payroll | Small Business Advice | Sage Singapore”. Sage.com. N.p., 2017. Web. 29 June 2017.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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