True to its mandate, the Davis Tax Committee (DTC) has been hard at work reviewing the South African tax system. Since its formation in 2013, it has already issued reports on small and medium enterprises (SMMEs), Base Erosion and Profit Shifting (BEPS) and VAT. It also compiled a macro analysis of the South African tax system, a World Bank study on the effective tax burden in South Africa and presented carbon tax proposals.
However, on 13 July the committee issued the “Estate Duty Report” which deals with a variety of topics sure to spark outcry and fierce debate, especially from more wealthy taxpayers. Whatever the outcome of the report may be following consultations, taxpayers will need to review their estate and tax plans to accommodate the impending changes.
The Estate Duty Report
The terms of reference the Minister of Finance extended to the DTC included an investigation of the role and continued relevance of estate duty to support a more equitable and progressive tax system, especially in the light of estate duty being abandoned in many developed countries. In this inquiry, the DTC had to consider the interaction between capital gains tax (CGT) and estate duty. The main findings and recommendations of the report are as follows (read more)…. http://www.gt.co.za/news/tax/2015/07/davis-tax-committee-significant-changes-proposed-to-estate-duty-and-tax-on-trusts/