Must a person who only receives income below the tax threshold be registered for income tax?
26 May 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Kindly advise whether the following person should be registered for tax
I have a trust
which awards net interest below the tax threshold to a person in his
twenties. However, he has been diagnosed as schizophrenic. He
is in sheltered care and is not employed and probably will never be able to
earn his own income.
The new trust
tax returns require the tax reference number of beneficiaries or may I insert
the identity number of the above person.
advise whether minor children receiving awards below the tax threshold if they
need to be registered.
are correct that a person must only register for normal tax if that person is
"a person chargeable to tax” (according to section 151 of the Tax
Administration Act). Normal tax can only be levied on taxable income and
the rebates are then deducted from the tax so calculated. The tax
threshold is relevant for provisional tax purposes only.
to submit returns arises in terms of the annual notice. A natural person
is obliged to furnish a return if that person carries on a trade other than as
an employee. It then "exempts” a natural person from furnishing a return
if the gross income of that person is less than the tax threshold or that
person’s remuneration was less than R250 000 (not applicable).
The issue of
having to enter a tax registration number on the tax return for a trust was
taken up with SARS. We don’t know if it will be a compulsory field for
the 2015 return and can’t comment on whether the identity number will
suffice. It is not a compulsory field for the 2014 one and you can leave
the detail out.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.