Share trades / investment and Tax -- the muck cleared?

[CHATTYCHAT]

Earlier forum talk about share trades, share investment etc and the tax implications has reference. I quote from the (SA) Budget Tax Proposals 2007/8: http://www.sars.gov.za/budget/documents/budget/2007/sars/Budget%20Insert%202007.pdf "The gains on the sale of shares can be taxed either as ordinary income or capital gains, depending on facts and circumstances. However, the facts and circumstances test is problematic. It results in some large institutions receiving capital gains tax treatment on the sales of shares, and many other players paying ordinary income tax. In order to provide equitable treatment, all shares disposed of after three years will trigger a capital gains tax event. This proposal will not effect the ordinary income tax treatment of executive employee share schemes. It will, however, require anti-avoidance rules that will prevent taxpayers from transferring new assets into shareholdings held for the three-year period. The above proposal will take effect on 1 October 2007." It seems a good idea to keep an account for each of one's investment and trading. The latter will be normal (trading) income or loss, the former will at least be focussed on attracting CGT. Little time left to organize one's portfolio before 1 Oct 2007! The tough one here is that losses on the trading acc will probably be hedged, avoiding one to set it off against 'other' (taxable) income, for instance that well deserved unjustifiable high salary and perks (?!) The mechanisms are aptly described in the following brochuer (which has been referred to in earlier discussions) and published by SARS in Feb 2006 - which one will have to read in conjunction with new regulations: http://www.sars.gov.za/it/Brochures/Other%20Brochures/Tax%20Brochure%20for%20Share%20Owners%20Latest...

[SimonPB]

you can't off set trading losses against other income. But you can roll a loss forward to the next tax year.