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FilingTim says: 22 January 2017 at 8:06 Naturally when extra income is generated, fair enough, tax must be paid. I have seen you address the Forex trading profit questions from taxpayers but no case of forex trading losses. How does one address Forex trading losses in a personal tax return? |
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TaxTim says: 30 January 2017 at 11:54 Assuming you are actively trading forex (and not just holding on to it for investment purposes for a few years), the loss would need to be declared in the business income section of the tax return. You would need to include the amount you put in /started with as Cost of Sales, and then the amount received must be declared as gross income. The overall amount should equal a loss and should equate to the tax statement received from the trader/investment bank. If there is interest, this should be disclosed in the investment section of your tax return and will be subject to the R23,800 annual interest exemption. Depending on a variety of factors, SARS may either allow the forex loss to be set off against other income you have earned in the year of assessment, or they may "ring-fence" the loss which means the loss will be carried forward and only set off against future profits from forex trading. Read our blog on Ring Fencing and work your way through the decision tree to see if the loss will be ring-fenced. |
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