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In terms of the Taxation Laws Amendment Act, any income or capital gains that would previously have been exempt from tax will now be taxed from March 1 this year. “In the US they are taxing the money that is coming home, so people tend to keep it offshore longer,” says Engel, who was at National Treasury in 2002 when the participation exemption was introduced.
This look-through principle may further contribute to driving much-needed investment capital from SA at a time when we definitely cannot afford it. “It will not hit the super-rich because they never intended to bring the money back,” says Engel. “People who set up offshore trusts as part of their expatriate planning will also not be too bothered.”
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