TAX TRAINING FOR TRADERS

1. TAX TRAINING FOR TRADERS Iquote Trading TRAINING DOCUMENT

2. Contents • Welcome and introductions • Tax principles • Foreign currency transactions • Tax compliance • Exchange control • Examples Tax Training for Traders

3. Tax Principles • Tax concept of “trade” • Any activity conducted and any trade or profession, eg salary, renting property, trading in CFD’s Tax Training for Traders

4. Tax Principles Cont… • Per Trade • Gross income • Amounts received not of a capital nature • Shares vs CFD’s and Futures • Disposal of shares deemed to be capital • Schemes of profit-making • Brokerage income 16 July 2014 4 Tax Training for Traders

5. Tax Principles Cont… • Per Trade • Gross income • Less: Exempt income • Local interest (R21,000/R30,000 – foreign exemption utilised) from all sources • Foreign interest/dividends (R3,500) • Local dividends • Equals: Income 16 July 2014 5 Tax Training for Traders

6. Tax Principles Cont… • Per Trade • Income • Less: Expenses/Losses • In the production of income • Not of a capital nature • Less: Deductions/Allowances • Equals: Taxable income/loss 16 July 2014 6 Tax Training for Traders

7. Tax Principles Cont... • Taxable income/loss per trade • Add back: Taxable loss from foreign trade • Add back: Taxable loss from “suspect trade” • Add: Taxable capital gains • Equals: Taxable income/loss Tax Training for Traders

8. Taxable Income • Taxable income • Determine tax liability • Less: Rebates • Less: Foreign tax credits • Equals: Tax payable Tax Training for Traders

9. Expense Examples • Direct expenses • Monthly update fees • Telephone/Internet • Commissions paid • Entertainment/Refreshments • Motor vehicle expenses • Business vs private Tax Training for Traders

10. Expense Examples Cont… • Home office expenses • Interest & insurance • Electricity & water • Rates • Cleaning 16 July 2014 10 Tax Training for Traders

11. Deductions/ Allowances • Repairs • Wear and tear • Computer • Office equipment • Software • Pension/RA/Medical Tax Training for Traders

12. Disallowed Expenses • Personal expenses • Suspect trades • Re-imbursable expenses Tax Training for Traders

13. Capital Gains Tax • Per asset • Proceeds • Less: Base cost • Pre-valuation date asset • Post-valuation date asset • Equals: Capital gain or loss Tax Training for Traders

14. Capital Gains Tax Cont… • Capital gain or loss per asset • Less: Annual/Special exclusions • Annual exclusion (R17,500) • Primary residence exclusion (Proceeds < R2,000,000 or R1,500,000) • Equals: Net capital gain or loss 16 July 2014 14 Tax Training for Traders

15. Capital Gains Tax Cont… • Net capital gain (capital loss carried forward) • Taxable capital gain • Natural person: 25% • Juristic person: 50% • Included in taxable income 16 July 2014 15 Tax Training for Traders

16. Foreign currency transactions • Currency of transaction • Exchange rates • Foreign exchange differences • Foreign currency pools Tax Training for Traders

17. Tax Compliance • Provisional tax returns • VAT returns • Annual income tax return • Turnover tax 16 July 2014 17 Tax Training for Traders

18. Exchange Control • Foreign investment allowance • Tax clearance application • Earning income offshore Tax Training for Traders

19. Example (salary earner) 16 July 2014 19 Tax Training for Traders

20. Example (trader) 16 July 2014 20 Tax Training for Traders

21. Example (trader) Cont… 16 July 2014 21 Tax Training for Traders

22. Example (trader) Cont… 16 July 2014 22 Tax Training for Traders

23. Disclaimer This training is intended to give you an understanding of the tax principles affecting taxpayers and help you understand some tax terminology. Accordingly, the information supplied by the presentation and presenter does not constitute any form of tax opinion that can be relied upon by taxpayers in the preparation of their tax returns. 16 July 2014 23 Tax Training for Traders

24. Contact details • Web-site: www.kellyandkinder.co.za • E-mail: robin@kellyandkinder.co.za • E-mail: phil@kellyandkinder.co.za • Cell: Robin – 083 651 3374 • Cell: Phil – 083 635 9029 • Office: 031 765 3468 16 July 2014 24 Tax Training for Traders