My client is insolvent. Date of insolvency 12 October 2002. His tax submission is declined. Reason he must register a new income tax number. The system did not allow us to do the registration via e-filling. Can we do the registration in Alberton if the in
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
In terms of the current practice generally prevailing, which we agree with, three separate taxpayers will be liable for tax, namely:
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The insolvent person for the period before insolvency (that is, up to the date preceding the date of sequestration);
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The insolvent estate (a new entity for tax purposes from the date of sequestration); and
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The insolvent person for the period on and after the date of sequestration.
The trustee would be responsible for the insolvent estate, but the insolvent, being a new taxpayer will have to register as a taxpayer. This is done by using the RAV1 form. The individual can, or should, be registered as a taxpayer when required and that can be before rehabilitation.
The insolvent person will be assessed as a natural person for the period before insolvency, as well as for the period subsequent to insolvency, should any income accrue to that person in his or her personal capacity.
The registration as a taxpayer doesn’t have to be done in the place where the person was sequestrated.