Nerd alert! Do you know your B’s and C’s?

It’s that time of year again and the form dispersing fairies are out in full force, making sure you have all you need to do your 2015/2016 tax return. The guys at SARS are expecting some tax certificates from you, which you’ll soon be able to download from the 'Reports' section on our website. These are your IT3B and IT3C certificates which tell SARS how much money you’ve earnt from your investments.

Now just reading the word ‘tax’ might make you gag (eek sorry!). Nobody actually wants to give their money to the tax man – the guy gets a pretty bad wrap. But we all know it’s just something we gottta do, like visiting the dentist. In saying that, we don’t want the experience of going through your forms to feel like pulling teeth, so we’re going to try and make it #easy for you. Here’s what you need to know about your IT3B and IT3C certificates:

The IT3B certificate is all about the income you’ve generated from your investment. It’s going to reflect:

Local dividends: this is the amount which has been paid to you in dividends from JSE listed companies in the last tax year. We automatically pay 15% dividend withholding tax on these for you, so this appears on your certificate to let SARS know that it’s done and dusted. Make sure you disclose this on your tax return and that’s it - finished and klaar.

Foreign dividends: this represents any dividends you received from JSE listed companies which earn money overseas. We’ve paid the 15% dividend withholding tax on your behalf, but you still need to disclose this on your tax return.

Taxable dividends: This represents REIT (Real Estate Investment Trust) distribution and applies to those of you who hold shares in a company that invests in property.

Interest: This amount of interest, which you earn on local and foreign investments, is considered as income and you'll need to declare it to SARS.

Bank Accounts Interest: This is the interest you earn on your free cash – the benchwarmer money you have in your EasyEquities account that is dying to be invested (Shame man!). Any interest you earn in a year over R23 800 (R34 500 if older than 65) is payable when you submit your tax return.

The IT3C certificate is all about capital gains. How much did your investment grow? Did you sell anything? Did you earn any profit by doing so? You’re only taxed on shares that you sell. Your IT3C certificate is going to show:

A list of companies you’ve invested in – pretty self-explanatory.  

How many shares you have in each and how much you bought them for. Because you can buy shares for a certain price on one day, and then buy more of the same shares on another day when the price is different, the cost per share is going to be shown as an average of those prices – to keep things simple! Obvs! So if you bought 1 share at R50 on Monday and another at R100 on Wednesday, you’d have two shares which you paid R150 in total for right? (Stay with us!) Even though they were bought at different prices, the average cost per share is going to be: R150 divided by 2 shares = R75.00 per share.

If you’ve sold a share at a higher price than when you bought it, you’ve made yourself some dosh haven’t you? SARS is going to want in on that. ‘Proceeds’ is going to reflect the amount you sold your shares at and ‘Profit/loss’ is going to reflect how much money you made or lost in that sale. The good news is that SARS is only interested in this amount if it is greater than R30 000 – that’s when you’ll start getting taxed on it.

Glad we could get that cleared up for you! If you’re still keen to do some more reading up on tax stuff (such a nerd – we love it!), there’s some #easy info on our FAQ page for you to check out!