Junk Status – What does it mean?August 4, 2016
Sugar Tax ProposalsAugust 22, 2016
Currently, the Act makes provision for tax exemption for all “bona fide” bursaries or scholarships granted by employers to employees or to relatives of qualifying employees, subject to certain monetary limits and other requirements.
If a bursary or scholarship is awarded to a relative of the employee, the exemption will apply only if the employee’s remuneration does not exceed R250 000 during the year of assessment. In addition, the amount of the bursary or scholarship will only be exempted up to a limit of R10 000 for studies from Grade R to 12 including qualifications in NQF levels 1 to 4 and R30 000 for qualifications in NQF levels 5 to 10.
The monetary limits associated with bursaries and scholarships granted to relatives were last revised in 2013. In order to support skills development and to encourage the private sector (employers) in the provision of education and training, government intends to increase the monetary limits for bursaries and scholarships granted to the relatives of qualifying employees.
It is proposed that the monetary limits be increased for bursaries and scholarships granted by employers to employees or relatives of qualifying employees:
- The monetary limit in respect of remuneration for qualifying employees will be increased from R250 000 to R400 000.
- The monetary limits in respect of exempt bursary or scholarship will be increased from R10 000 to R15 000 and from R30 000 to R40 000 respectively.
The proposed amendments are deemed to have come into effect from 1 March 2016 and will be applicable in respect of the years of assessment commencing on or after that date.
These proposals still need to be given effect by the appropriate legislation and we will keep you informed of any developments in this regard.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)