The Minister of Finance announced amendments to tax and other legislation that may affect investors. These changes, which come into effect on 1 March 2015, are discussed in more detail below.

Income tax

Individuals and special trusts

The tax brackets have been adjusted for inflation and income tax rates have been raised by 1% for all taxpayers earning more than R181 900 a year. The highest marginal tax rate for individual taxpayers has increased from 40% to 41%. The personal income tax rates for the 2015/2016 tax year are listed below.

Budget 2015 Income tax

Companies and trusts

The income tax rate for companies remains unchanged at 28% and the rate for trusts (other than special trusts) has increased from 40 to 41%.

Tax thresholds

Tax thresholds have been amended to:

  • R73 650 for taxpayers younger than 65 (R 70,700 in 2015)
  • R114 800 for taxpayers aged 65 to below 75 (R 110,200 in 2015)
  • R128 500 for taxpayers aged 75 and older (R 123,350 in 2015)

Rebates

Rebates deductible from tax payable have been amended to:

  • R13 257 per year for all individuals (primary rebate) (R 12,726 in 2015)
  • R 7 407 for taxpayers aged 65 and older (secondary rebate) (R 7,110 in 2015)
  • R 2 466 for taxpayers aged 75 and older (tertiary rebate) (R 2,367 in 2015)

Interest exemptions

Interest exemptions remain unchanged:

The exemption on interest earned for individuals younger than 65 years remains R23 800 per annum.

The exemption for individuals older than 65 years remains R34 500 per annum.

Medical tax credits

Monthly tax credits for medical scheme contributions will increase as follows:

  • From R257 to R270 per month per beneficiary for the first two beneficiaries
  • From R172 to R181 per month for each additional beneficiary

Dividends tax

Dividends tax remains 15% on dividends paid by resident companies and by non-resident companies for shares listed on the JSE.

Most foreign dividends received by individuals from foreign companies (shareholding of less than 10% in the foreign company) are taxable at a maximum effective rate of 15%.

Interest withholding tax

A final tax at a rate of 15% is imposed on interest from a South African source payable to non-residents with effect from 1 March 2015. Interest is exempt if payable by any sphere of the South African government, a bank or if the debt is listed on a recognised exchange.

Capital gains tax (CGT)

CGT inclusion rates remain unchanged but the maximum effective rate has increased slightly for individuals and special trusts, as well as for other trusts. The effective rate remains unchanged for companies.

Budget 2015 Capital Gains Tax

Specific exclusions worth mentioning are:

  • Annual exclusion of R30 000 for capital gain or loss granted to individuals and special trusts
  • R300 000 granted to individuals in the year of their death