What is the taxable income figure where ring fencing of tax losses can kick in? Is it R 1.5million?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
You must remember that this amount may change from year to year. It is the taxable income, of the individual, determined without having regard to the other provisions of section 20A of the Income Tax Act and any assessed loss and balance of assessed loss which were set off in terms of section 20 in determining that taxable income. Section 20A then, with respect to this requirement only, applies where this ‘taxable income’ equals or exceeds the amount at which the maximum marginal rate of tax chargeable in respect of the taxable income of individuals becomes applicable. For the 2019, and 2020 year of assessment, this amount is in fact R1 500 000.