President Obama's plan to raise capital gains taxes will drive investment offshore

English: President Barack Obama gives his Stat...

In his State of the Union Address, President Obama barely touched on the country’s soon-to-be $16 trillion national debt, massive joblessness, entitlement insolvency, economy-crippling government regulations and the other compelling issues (“Obama targets economy, taxes in address,” Jan. 25).

Sounding like an Occupy Wall Street interviewee, he once again attributed virtually all of the country’s ills to the supposed failure of “millionaires and billionaires” to pay their “fair share.” Specifically, he is troubled that those with the greatest income pay only a 15 percent tax rate on their long-term capital gains and proposes that their rate be doubled to 30 percent.

The president’s position is as fatuous as it is incoherent.

via President Obama’s plan to raise capital gains taxes will drive investment offshore – baltimoresun.com

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SARS tax amendment for ownership of secondary properties

Tax

Last year South African Revenue Services introduced a tax amnesty covering capital gains tax, transfer duty and secondary tax for all natural persons South African citizens willing to transfer property owned by them in a company, a trust or a close corporation into their own names.The amnesty, it was made clear, would expire in December 2012.

This “enlightened” measure, says Tony Clarke, MD of Rawson Properties, was hailed by the property sector as a breakthrough because the capital gains tax on companies 15% was high and on trusts higher still 20%, whereas by contrast individuals usually pay only ±10% and more importantly are exempt of tax on the first R1,5 million capital gain.

However, there was one major snag: the exemption applied only to property in which the owner “ordinarily resided”, i.e. his primary residence. Second homes, holiday homes, investment properties and the like initially could not be transferred to individual ownership without paying in full the taxes referred to.Now, however, that has all changed. The recently promulgated Tax Laws Amendment Bill allows secondary residential properties to benefit from the amnesty in the same way as primary properties – provided the transfer is set in motion, i.e. not necessarily completed – by December 2012.

Clarke said that there will still be cases in which it might be preferable to hold the property in a company or other legal entity.  He pointed out, too, that the conveyancer’s fee would remain payable.Nevertheless, he said, the vast majority of property owners stand to gain significant tax benefits if they make use of the amnesty before it expires and he advised them strongly to do so.

via SARS tax amendment for ownership of secondary properties – SA Commercial Prop News | Commercial Property News in South Africa