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Crucial aspects for high net worth individuals

By Staff Writer

The focus this year was on a fair, efficient, transparent, certain and uncomplicated budget. With not much manoeuvrability the “super-rich” unfortunately received special attention.

In line with expectations, effective capital gains tax rates will be increased and effective from 1 March 2012 as follows:

Individuals & Special Trusts       13.33% max (up from 10%)
Trusts                                       26.66% (up from 20%)
Corporates                                18.66% (up from 14%)

Similarly Dividends Tax will be levied at 15% and not the expected 10%, effective 1 April 2012.

A high emphasis was also placed on tax compliance and especially by the wealthy, in particular through their trust vehicles. Non-compliant Tax Practitioners and Intermediaries will also come under scrutiny!

From October this year, ad valorem excise duties will apply to those ever-so-expensive toys of the wealthy. Small aeroplanes and helicopters (weighing less than 5 ton in effect for private use) will attract 7% ad valorem excise duty. Boats exceeding 10 meters in length will likewise be subject to a 10% ad valorem excise duty.

National health insurance will be phased in over the next 14 years and as expected, funding will come from the following possible sources:

Increase of the VAT rate,
A payroll tax on employees,
A surcharge on the taxable income of individuals, or
A combination of the above.

The funding options will be implemented as from 2014/2015.

The 2012/13 may well be known as the “Robin Hood” of budgets!

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