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IT3(B) TAX CERTIFICATE FOR UNIT TRUSTS / ETFSThe world of tax is complicated and getting a thorough understanding of what you pay tax on is not a simple process. Furthermore, finding the most tax efficient way of doing things is even more complex and based on my research, to find someone to assist you is not going to be easy. Unfortunately, these aren’t really topics I’m equipped to explain, perhaps one day I will be, but today I want to chat about something else. This evening I received an IT3(b) tax certificate for a unit trust account I have and a friend recently asked me about this so I wanted to do some research on the topic and explain as best as I can as to why you’d receive an IT3(b) tax certificate. Most people know that with Retirement Annuities (RAs) you get a tax break.. you’d fill this out when submitting to SARS or hand it over to your accountant. It makes sense to get at IT3(b) tax certificate for an RA, but why would you need one for a unit trust (or ETF for that matter)? The answer is quite simple: With any investment, when you make a profit you have to pay tax. To the same effect, if you sell said asset, you will have to pay Capital Gains Tax (CGT) on the growth of said asset. So with your unit trust there are two taxes:
It’s unfortunate that we’re paying such high amounts on any form of equity growth but that’s just how it goes in South Africa and most countries for that matter. If you’d like to dig deeper into the different types of income and how to provide SARS with what they require I recommend reading this page on the SARS website. |
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