WHAT IS ESTATE PLANNING?
“In the world, nothing can be said to be certain,
except death and taxes”
- An ‘estate’ comprises the assets and liabilities that an estate planner accumulates during their lifetime, and which they leave behind at their death
- ‘Estate planning’ has been defined as the process of creating and managing a program that is designed to:
- Preserve, increase and protect an estate planner’s assets during their lifetime;
- Ensure the most effective and beneficial distribution thereof to succeeding generations on death, and in accordance with their wishes
- A common misconception about estate planning is that it revolves solely around the making of a Last Will and Testament, or the structuring of an estate planner’s affairs to reduce estate duty
- Estate planning is multidisciplinary in nature, and should consider an individual estate planner’s financial, economic, social, and psychological needs in relation to their estate, self, family and their beneficiaries
- It is not a once-and-for-all activity. The estate planner should regard it as a process, with built in flexibility
- It involves the estate planner entering into a strategic exercise, comprising the following steps:
- Determining a snapshot of net worth – including assets, liabilities and income
- Setting goals and planning objectives – deciding in advance what to do with assets and liabilities
- Deciding on appropriate estate planning tools – once the objectives have been set, deciding on ‘how’ to do it
- Setting timeframes – deciding ‘when’ to do it
- Execution – deciding ‘who’ should do it, deciding on the team of professionals to assist with executing the plan
TAX OMBUD’S REPORT ON THE INVESTIGATION INTO ALLEGED DELAYED PAYMENT OF REFUNDS AS A SYSTEMIC AND EMERGING ISSUE
The office of the Tax Ombud provides you with a fair and simple way to seek a resolution for a service, procedure or administrative dispute you have already unsuccessfully tried to resolve through SARS. The Office of the Tax Ombud is independent of SARS.
Taxpayers have, over the years, been complaining that SARS unduly delays the payment of verified refunds. The complaints reached their pick in the period December 2016 to March 2017. Taxpayers identified certain mechanisms allegedly employed by SARS, in the implementation of the tax collections system, to cause the delay. They argued that, in this respect, the tax collection system was being implemented unfairly by SARS. This resulted in financial hardships to them and, in some instances, the near collapse of their businesses; in others, loss of jobs ensued.
The Tax Ombud carried out an extensive review including obtaining inputs from most professional bodies in South Africa. From this review, it became clear that the system allows for SARS to unduly delay the payment of verified refunds to taxpayers in certain circumstances. This has become a systemic issue. The system does not sufficiently protect taxpayers. The removal of the obstacles discussed in the Report, as well as any others, would go a long way towards addressing the problem.
SARS in its response to the Ombud’s findings says:
“It is unfortunate that the Tax Ombud has arrived at the conclusion
that the obstacles are systemic in their nature, as they are the
exception rather than the rule.”
Let’s hope that SARS takes heed and that such practices as reported by the Ombud are discontinued and the process of refunds is administered in a just and equitable fashion. If you are experiencing any problems with refunds please do not hesitate to contact us for professional assistance in this regard.
AGRICULTURE AND FINANCE HELP LIFT SA OUT OF RECESSION
After two consecutive quarters of decline, the South African economy spluttered back to life in the second quarter of 2017. Positive contributions to higher economic activity across most industries – agriculture, finance and mining – lifted the gross domestic product (GDP) by 2,5% quarter-on-quarter.
Agriculture continued to show strong recovery from South Africa’s recent drought, increasing production by 33,6%. The rise in the second quarter was mostly driven by a rise in the production of field crops, maize and wheat, as well as increased production of horticulture products such as vegetables.
The 2,5% rise in GDP ends South Africa’s second recession since 1994. However, there are a few statistical points to note. Firstly, quarterly growth rates can be quite volatile. Secondly, the headline figure of 2,5% is the growth rate after annualisation, in other words what the annual growth rate would be if the quarterly rate were to be repeated for four consecutive quarters. Thirdly, if we compare the first half of 2017 with the first half of 2016, the growth rate was 1,1%.
Although the headline figure is the most publicised in the media, the key lesson is that it should not be used in isolation. There are other GDP indicators that complement the headline figure, and taken together they provide a more comprehensive picture of economic performance.
So even though 2,5% might seem like an impressive recovery, longer-term indicators show subdued growth. As a nation, the goal of achieving and sustaining higher rates of economic growth and development remains just as important as ever.
CLOUD BASED ACCOUNTING SOFTWARE: AN OVERVIEW OF THE PROS AND CONS
<table ” border=”0″ width=”100%” cellspacing=”1″ cellpadding=”1″>
- Mobile cloud accounting – Access to your data anywhere in the world.
- Cashflow – A ‘real-time’ view of your financial position which you can access at any time.
- Team access and collaboration –Everyone in your team can access the same data at the same time, no matter where they are based.
- Tracking – It’s easy to invoice and track inventory and you can schedule and make batch payments to suppliers.
- Updates – For most cloud based packages updates are automatic, giving less downtime.
- Get paid faster –You can track when invoices have been opened or not, so non-payment of invoices can be actioned quicker.
- Disaster recovery & fraud reduction – Your data is backed-up automatically in the cloud and in the event of any foreseen or unforeseen disasters.
- Easily integrated – Easily integrated into your existing systems and in the most cases will improve your processes.
- Fraud reduction – Automated processes increase the accuracy of financial reporting, giving more control over data and access to data.
- Cloud accounting add-ons – There are hundreds of add-on apps for cloud accounting software which could potentially streamline more of your processes.
- Informed decision making – With the financial information that will now be at your fingertips, you will be able to make more informed decisions regarding the performance of your business.
- Internet access – You are dependent on the internet to access your accounting data.
- Training – You will have to invest in some training for you and your staff.
- Research – You will have to do some research to find the right package for you.
- Monthly Packages – It’s worth noting that there is a tipping point between monthly cloud options. As your company grows, you will need to upgrade your package meaning a higher cost.
- Additional costs – The more you download, the more your internet bill will amount to.
- Cyber-attacks and data breaches – There have been some recent high profile cyber-attacks and data breaches of large global businesses, which means that cloud accounting providers are not immune to such attacks.
- It’s only as good as the information you put in – While many of the data input and collection functions can be automated, if this data is out of date or incorrectly posted, you may not be any better off than you are currently.
While there clearly are cons to moving to the cloud, it would appear the pros far outweigh the cons. By linking your cloud accounting to online shopping (depending on your product), you could easily make your products available globally.
If you are thinking of going online don’t hesitate to consult us for professional advice in this regard.