Monthly Archives: February 2014

Just a spoonful of sugar to help the medicine go down

04As from the 2013 tax year contributions to medical aid schemes are no longer allowed as a deduction.  This provision was replaced by the section 6A Medical scheme fees tax credit.  Instead of allowing contributions as a deduction from taxable income, the credit is deducted from taxpayer’s liability for normal tax.  The credit is in the nature of a rebate, rather than a deduction.

For the year of assessment ending 28 February 2014 the amount of the credit is equal to:

R242 per month in respect of benefits to the taxpayer;
R242 per month in respect of benefits to the first dependant;
R162 per month in respect of every additional dependant.

For a family of four the total rebate will be R808 per month.  It is a requirement that the contributions are actually paid and not only payable.  Contributions paid by an employer and taxed as a fringe benefit will be regarded as having been paid by the employee.

For the current year of assessment the deduction of medical expenses in addition to scheme contributions, is dealt with in terms of section 18 of the Act.  With effect from 1 March 2014 this provision is repealed and replaced with the section 6B Additional expenses medical tax credit.  The definition of “qualifying medical expenditure” for purposes of calculating this rebate is identical to the wording of the deleted section 18 and includes amounts paid to registered medical professionals, nursing homes and hospitals, and for prescribed medicines.  Once again it is a requirement that the expenses were actually paid.

Amounts recoverable from the medical scheme are not taken into account.  Expenditure necessarily incurred and paid in consequence of any physical impairment or disability suffered by the taxpayer or any dependant, is also taken into account as qualifying expenditure.  The definition of “disability” remains unchanged.

If the taxpayer or one of his dependants is a person with a disability as defined, or aged 65 years or older, the rebate is calculated as follows: 33.3% of the amount by which the actual medical scheme contributions exceed three times the section 6A medical scheme fees tax credit, as well as 33.3% of the qualifying medical expenses paid by the person.

Example 1

A family of four includes a person with a disability.  The taxpayer’s contributions to the medical scheme for the year of assessment is R48 000.  He also paid qualifying medical expenses of R12 000 and expenditure in consequence of the disability amounted to R24 000.

Section 6A rebate x 3 = R29 088
(R48 000 –R29 088) x 33.3% = R6 298
(R12 000 + R24 000) x 33.3% = R11 988

In addition to his section 6A rebate of R9 696, the taxpayer is allowed a section 6B rebate of R18 286 (R6 298 in respect of contributions and R11 988 in respect of qualifying expenses).

The basis for calculating the rebate in all other cases is completely different and best illustrated by way of an example.

Example 2

The taxpayer has a wife and two children.  He paid medical fund contributions of R48 000 and qualifying medical expenses of R24 000 during the year of assessment.  His taxable income for the year is R240 000.

In calculating the rebate, all qualifying expenditure is taken into account.  The actual contributions to the medical scheme are reduced by an amount equal to four times the section 6A rebate.

Qualifying expenditure:                      R24 000
Contributions:                                     R48 000 – (R9 696 x 4) = R9 216

The rebate is limited to 25% of so much of the aggregate of the two amounts calculated above as exceeds 7.5% of the person’s taxable income.

Rebate = [(R24 000 + R9 216) – (R240 000 x 7.5%)] x 25%
[R33 216 – R18 000] x 25%
R3 804

Thus, in addition to his section 6A rebate of R9 696 the taxpayer is entitled to a section 6B rebate of R3 804.

As the second rebate is calculated with reference to the person’s taxable income, lower income taxpayers benefit more.  Had the person’s taxable income in the above example been R442 880 or higher, he would not have received any rebate at all.

Whether the new system is simpler or more efficient is debatable.  The uniform rebate in respect of contributions will presumably ease SARS’s administrative burden.  From the taxpayer’s perspective however, the requirements regarding record-keeping and proof of expenditure remain the same.  For high income earners it may however not be worth the effort, as they will most likely not qualify for the second rebate.

This article is a general information sheet and should not be used or relied on 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.

Standard acknowledgements of debt and the National Credit Act (NCA)

03The new NCA not only regulates instalment sale agreements and lease agreements in respect of movables as was done by its predecessor,  the repealed Credit Agreements Act 75 0f 1980. The NCA applies to a much wider variety of credit agreements and has no monetary cap.  Instead of instituting legal action a creditor often gets a debtor to sign an acknowledgement of debt to facilitate repayment.

This document could contain a provision for instalments and interest and fees. The question arises whether this agreement in confirmation of an existing obligation constitutes a credit agreement for purposes of the NCA.

The purpose of this Act is to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers.

“Credit”, when used as a noun, is defined in the Act as a deferral of payment of money owed to a person or a promise to defer such payment; or a promise to advance or pay money to or at the direction of another person.

“Agreement” includes an arrangement or understanding between or among two or more parties which purports to establish a relationship in law between those parties.

The parties to a credit agreement governed by the NCA are referred to as the “consumer” and the “credit provider” and these definitions should be considered. An acknowledgement of debt normally refers to a historical event of cause and does not constitute a credit guarantee or any of the named credit transactions such as a pawn agreement, discount agreement, incidental credit agreement, instalment agreement, lease, secured loan or mortgage agreement or credit facility.

However, the fact that it contains a deferral of payment and requires the payment of interest, fees and other charges, will cause it to fall within the ambit of the catch-all term “credit transaction” provided for in Section 8(4)(f) of the Act.

Section 2(1) provides that the Act must be interpreted in a manner that gives effect to the purposes set out in Section 3. The question really is whether the legislature intended the rearrangement or the repayment terms of an existing debt,  for instance where money has already been advanced to a consumer a considerable period of time ago or where damages were suffered as a result of a delict or breach of contract, to constitute a credit agreement or transaction for purposes of the NCA.

Due to the elements of deferral and the charging of interest, fees and other charges in a standard acknowledgement of debt, and in the absence of any express or implicit indication to the contrary, it seems an inescapable conclusion that the agreement could be defined as a credit agreement within the meaning of the NCA. The relevance of this is that it might be that the credit provider would be required to register as such with the National Credit Regulator, affordability assessment would have to be done prior to conclusion, the consumer could become overindebted and apply for debt review, and many other onerous requirements will be applicable.

It is submitted that where the cause of action in relation to which the acknowledgement of debt was entered into is based on a contract or agreement which constitutes a credit agreement, the insertion of a no-novation clause into an acknowledgement of debt will not serve to exclude the agreement subsequently concluded, from the ambit of the NCA.

However, where the debt initially arose as a result of a delict, the insertion of a no-novation clause might have the effect of preserving the original cause of action, namely the delict, and thus cause the matter to fall outside the scope of the NCA.

One thing to be kept in mind is that a “consumer”, in respect of a credit agreement to which the NCA applies, means

  1. The party to whom goods or services are sold under a discount transaction, incidental credit agreement or instalment agreement;
  2. The party to whom money is paid, or credit granted, under a pawn transaction;
  3. The party to whom credit is granted under a credit facility;
  4. The mortgagor under a mortgage agreement;
  5. The borrower under a secured loan;
  6. The lessee under a lease;
  7. The guarantor under a credit guarantee; or
  8. The party to whom or at whose direction money is advanced or credit granted under any other credit agreement.

This definition might provide the answer as the acknowledgement of debt might, as a different cause of action, not qualify the consumer under the above definition.

So, too, is the underlying cause of action to the acknowledgement of debt, and it deserves no debate that signing an acknowledgement of debt is not something to go about without due consideration.

Should a court be convinced that the written acknowledgment of debt is subject to the NCA the court could be required to make a ruling in terms of Section 130(4)(b) of the NCA, which states:

In any proceedings contemplated in this section, if the court determines that – … the credit provider has not complied with the relevant provisions of this Act, as contemplated in subsection (3)(a), or has approached the court in circumstances contemplated in subsection (3)(c) the court must – adjourn the matter before it; and make an appropriate order setting out the steps the credit provider must complete before the matter may be resumed.

In Adams v SA Motor Industry Employers Association 1981 (3) SA 1189 (A) at 1198 – 1199, the court held that there is a presumption against novation and that, where novation was not intended, it was possible for two obligations to co-exist. These obligations would be interdependent, and the creditor does not have a free election to enforce the original obligation.

An acknowledgment of debt, sometimes referred to as an IOU, is evidence of a debt which is due, but differs from a promissory note as it does not contain an express promise to pay. However, where the acknowledgment of debt is coupled with an undertaking to pay, it will give rise to an obligation in terms of that undertaking.

The case of Rodel Financial Service (Pty) Ltd v Naidoo and Another 2013 (3) Sa 151 (Kzp), and its annotations is recommended for reading and getting a better understanding of the applicable principles.

This article is a general information sheet and should not be used or relied on as legal or other 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 legal adviser for specific and detailed advice.

POPI-Wet

02Die konsepwet op die Beskerming van Persoonlike Inligting, waarna algemeen verwys word as die POPI-wet, sal binnekort wetgewing word en is bedoel om die prosessering van persoonlike inligting te reguleer. Dit moet saamgelees word met ander relevante wette soos:

• ELEKTRONIESE KOMMUNIKASIE EN TRANSAKSIES Wet 25 of 2002 (‘ECT’)
• BEVORDERING VAN TOEGANG TOT INLIGTING Wet 2 of 2002 (‘PAIA’)
• REGULERING VAN DIE ONDERSKEPPING VAN KOMMUNIKASIES Wet 70 of 2002 (‘RICA’)
• VERBRUIKERS BESKERMINGS Wet 68 of 2008 (‘CPA’)

Gegewe die e-handel en tegnologie wat deur en tussen besighede gebruik word, word persoonlike Inligting van beide werknemers en kliënte al hoe makliker toegangklik vir derde partye.

POPI beoog om sekere beskermingsbeginsels in te voer ten einde minimumvereistes te stel vir die prosessering van persoonlike inligting. Daar is agt beginsels ter beskerming van inligting vervat in hoofstuk 3 van die konsepwet, naamlik:

Aanspreeklikheid; Beperking op prosessering; Spesifisering van die doel; Beperking op verdere prosessering; Kwaliteit van inligting; Openheid; Sekuriteitsbeheermaatreëls; Deelname van die persoon waarop die inligting betrekking het.

Die doel is om deursigtigheid te bevorder m.b.t watter inligting versamel kan word en hoe dit verwerk gaan word. Dit mag dalk die einde beteken van al die ongevraagde bemarkingsoproepe en rommelpos wat ons op ‘n daaglikse basis ontvang.

Prosessering beteken breedweg enigiets wat gedoen word met persoonlike Inligting, insluitend versameling, gebruik, bewaring, disseminasie, modifikasie of vernietiging (ongeag of sodanige prosessering outomaties is al dan nie).

POPI-nakoming behels die vaslegging van die minimum vereiste data, die versekering van akkuraatheid en verwydering van data wat nie meer benodig word nie. Hierdie maatstawwe sal waarskynlik die algemene betroubaarheid van ‘n organisasie se databasis verbeter.

Nakoming vereis verder die identifisering van persoonlike Inligting en die tref van redelike maatreëls om die data te beskerm, soos  nagaan van die werkvloei van kliënte se dokumente en toesien dat noodsaaklike inligting nie verlê word of in die verkeerde hande beland nie.

Die POPI-wet  strook met soortgelyke wetgewing wat in 70 tot 80 ander lande bestaan. Suid-Afrika is nou gereed om te voldoen aan internasionale standaarde vir die versameling en hantering van persoonlike inligting.

Die Wet beskerm nie net die manier waarop inligting gebruik en/of hergebruik word deur die ontvanger van die inligting nie, maar die party wat die inligting versamel het ook die verantwoordelikheid om seker te maak dat dit akkuraat en aktueel is en nie misleidend is nie.

Persoonlike Inligting mag slegs geprosesseer word as vrywillige, spesifieke en oorwoë toestemming daartoe verkry is.

‘n Reguleerder van Inligtingbeskerming (Information Protection Regulator) wat wye gesag sal hê, sal aangestel word en sal die openbare belang kan opweeg teen ‘n individu se reg op privaatheid.

Daar is egter gevalle waar POPI nie van toepassing sal wees nie. Artikel 4-uitsonderings sluit in:

  1. suiwer huishoudelike of persoonlike aktiwiteite
  2. inligting wat reeds genoegsaam gedeïdentifiseer is
  3. sommige staatsfunksies, insluitend kriminele vervolging, nasionale sekuriteit ens.
  4. joernalistiek onderworpe aan ‘n etiese kode
  5. funksies van die regsbank ens.

Bron:
http://www.popi-compliance.co.za/
http://www.saaci.co.za/

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Welkom by ons nuwe nuusbrief!

Geagte leser,

Welkom by die eerste uitgawe van ons maandelikse nuusbrief.  Die doel van ons nuusbrief, is om aan u interessante besigheidsartikels en waardevolle inligting, relevant tot ons wye reeks dienste, aan u te bring soos:

  • inligting oor die SAID, hul prosedures en praktyke;
  • nuttige en toepaslike besigheidswenke;
  • ‘n Samevatting van die belangrikste inligting van belang vir besigheid en die algemene publiek; en
  • inligting betreffende ons firma en sy aktiwiteite.

Ons vertrou dat u dit die moeite werd sal vind om die nuusbrief te lees en nooi u uit om kommentaar te lewer oor enigiets in die inhoud of om met ons te skakel vir verdere inligting of ander ondersteuning.

Meer oor ons kantoor

Die kantoor is in Vredenburg geopen in Oktober 1973. Kantoor spasie was vir ‘n geruime tyd gehuur in die Hoofstraat. Na mate die kantoor gegroei het en ontwikkeling begin plaas vind het in Vredenburg, het die kantoor na die Mediese Sentrum verskuif in 1996, waar ons vir 12 jaar kantore gehuur het. Laat in 2007 het ons, ons eie eiendom gekoop te Houtstraat 22, Vredenburg en omskep in kantore. Die nuwe kantoor het ons offisieel in Maart 2008 geopen.

images

Meer oor ons personeel

Cecil Kilpin bied opleidingsgeleenthede vir klerke wat hul leerlingskap wil doen en het ons tans ‘n paar ingeskrewe klerke wat besig is met hul in diens opleiding en wat deeltyds studeer. Ons span bestaan tans uit 13 personeellede. Hulle is :

Personeellid Pos beklee Jare in diens
Johan la Grange Bestuurder 37 Jaar
Sandra van Wyk Ontvangdame 26 Jaar
Martie Oosthuizen Tikster 18 Jaar
Susarha la Grange Debiteure / Admin 24 Jaar
Carin la Grange Admin 10 Jaar
Johann de Wit Klerk 15 Jaar
Gerrit van der Westhuizen Klerk 15 Years
Hester de Witt Klerk / Admin 8 Jaar
Heinrich Nel Klerk 6 Jaar
Louis Malan Klerk 6 Jaar
Maryke van Aarde Klerk 4 Jaar
Heather Norman Klerk 4 Jaar
Hentian du Preez Klerk 1 Jaar

Die firma se filosofie

Cecil Kilpin & Kie. vind sy oorsprong reeds in 1902 en hul primêre doelwit is om saam met elke kliënt te werk om te verseker dat sy finansiële belange beskerm en versterk word.

Om die bogenoemde doelwit effektief te kan uitvoer, is dit altyd die vennote se “modus operandi” om ‘n sterk persoonlike verhouding met die firma se kliënte op te bou, gegrond op ‘n wedersydse vertroue en respek binne die raamwerk van vertroulikheid.  In die uitvoering van ons take handhaaf ons hoë tegniese standaarde gebaseer op ‘n wye spektrum van kommersiële ondervinding en verskaf ons gepaste oplossings vir alledaagse probleme.  Die samewerking en lojaliteit wat ons ontvang van ons kliënte, getuig van ons doelgerigtheid om die voorgenoemde doelwitte te bereik.

Welcome to our new newsletter!

Dear reader,

Welcome to our first edition of our monthly newsletter. The purpose of our newsletter, is to bring you interesting business articles and valuable information, relevant to our wide range of services, such as:

  • Information regarding SARS, their procedures and practices;
  • Handy and relevant business tips;
  • A summary of the most important information relevant to business and the general public; as well as
  • Information regarding our firm and it’s activities.

We trust that you will find it worthwhile to read the newsletter and invite you to make comment on any of the articles or to either contact us for more information or for further information on a subject.

About our office

The Vredenburg office was opened in October 1973. For a number of years, office space was rented in the Main Street. As the business grew and new developments started in Vredenburg, our office moved to the Medical Centre in 1996, there we rented office space for 12 years. In late 2007 we bought our own premises at 22 Hout Street, Vredenburg and converted it to offices. The new office was officially opened in March 2008.

images

About our personnel

Cecil Kilpin offers learnership opportunities for clerks that would like to do their learnerships and as such we currently have a few article clerks that are busy with their in work training and part-time studies. Our team currently consist of 13 personnel members. They are:

Personnel Job title Years in service
Johan la Grange Manager 37 years
Sandra van Wyk Receptionist 26 years
Martie Oosthuizen Typist 18 years
Susarha la Grange Debtors / Admin 24 years
Carin la Grange Admin 10 years
Johann de Wit Clerk 15 Years
Gerrit van der Westhuizen Clerk 15 Years
Hester de Witt Clerk / Admin 8 Years
Heinrich Nel Clerk 6 Years
Louis Malan Clerk 6 Years
Maryke van Aarde Clerk 4 Years
Heather Norman Clerk 4 Years
Hentian du Preez Clerk 1 Year

The firm and its philosophy

Cecil Kilpin & Co. can trace its roots back to 1902, and their primary philosophy is to work with each of their clients to ensure the protection and enhancement of their financial interest.

In order to carry out the aforementioned philosophy effectively it has always been the partners “modus operandi” to build a personal relationship with each of the firm’s clients, based on mutual trust and respect within the framework of confidentiality.  In doing the aforementioned we offer high technical standards based on a wide range of commercial experience and tailor made realistic solutions to today’s problems.  The co-operation and loyalty received from our clients testifies to the commitment which we have to the aforementioned objectives.