Optima Brokers

Specialist Financial Planning

Estate Duty and Capital Gain Tax on Offshore Assets

Jun 27, 2015

Many South Africans have invested in offshore property in recent years but neglected to consider the tax effect from an estate planning point of view, as it is often assumed that offshore assets will not form part of a resident’s estate for estate duty purposes. In South Africa residents are taxed on worldwide income and capital gains and estate duty is levied on the worldwide assets of ordinarily residents including offshore assets. Therefore, it is essential to consider the amount of estate duty and capital gain tax (hereinafter referred to as “CGT”) payable on death with regards to offshore assets, as this will have an effect on the liquidity of the estate.

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Time in the Market Vs. Market Timing

May 27, 2015

The annual returns on the Johannesburg Stock Exchange (JSE) All Share Index (ALSI) for the period 1960 – 2013 are shown in the graph below. The ALSI has been negative for 13 of the 54 years (26%), and therefore it has been positive 76% of the time. The fact that the market returns fluctuate suggests that there may be a “best time” and a “worst time” to invest on the JSE. The “worst time” should theoretically be when the market has had a positive return and is entering a negative phase e.g. in 1960 the return on the ALSI was – 11.9% (including dividends), so the “worst time” to invest was at the beginning of 1960.

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