Tax Tips on Trusts - Expert Advice on Completing the New Income Tax Return for Trusts
22 May 2017
SARS streamlined its income tax return for trusts (ITR12T) on 15 May 2017. Ilsa Groenewald, Associate Director for tax at the Durban office of international audit, tax and advisory firm, BDO South Africa, outlines the key changes and offers advice on how to submit the return without a hitch.
The first critical change, according to Groenewald, relates to services rendered in South Africa but taxed outside the country.
“In the past, SARS allowed trusts to claim foreign tax credits against these services rendered. Going forward, trusts will not be able to claim foreign tax credits, however they will be entitled to claim a deduction against income from these services which was taxed outside the Republic,” she said.
Another change was the removal of Section 11D from the ITR12T. This provided for a deduction in terms of research and development and was now only applicable to corporate entities.
The Statement of Assets and Liabilities section had been revised to distinguish between interest-bearing and interest-free loan accounts, she said.
Groenewald explained that there were also several changes to the Rental and Farming section and care should to be taken when completing these sections. It would be helpful here to refer to The Rental Income Declaration for an example.
To make the process as hassle-free as possible, Groenewald offered several useful tips to bear in mind when completing the ITR12T.
Groenewald said that the 2017 e-filing process will open on 3 July 2017 for the completion and submission of 2017 income tax returns for trusts as well as for corporate and individual taxpayers. She pointed out that SARS would not accept income tax trust returns via post and that those who did not e-file the ITR12T would need to visit their local SARS office for help.
She recommended that taxpayers consult the comprehensive guide to the ITR12T on the SARS website which provided step-by-step guidance through the entire completion process. She added that anyone needing assistance with completing their returns could contact her on 031 5147030 or [email protected]
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