Multi-Generational Wealth: Building a Legacy That Outlives You

Dear Client, Tax season is here again, and many South Africans will receive an auto-assessment from SARS. Auto-assessments can be very convenient. SARS uses information from employers, medical schemes, retirement funds, banks and investment providers to pre-populate your tax return. In many cases, this makes the process quicker and easier. However, easier does not always mean correct. We have already seen cases where auto-assessments were not fully accurate or where important information still needed to be checked. That is why our message this tax season is simple: don’t just accept your SARS assessment without reviewing it properly first. Between 1 July and 12 July 2026, SARS will notify selected taxpayers by SMS or email if they have been auto-assessed. The notice will show whether you are due a refund, whether you need to pay SARS, or whether there is no amount payable or refundable. If you receive an auto-assessment and everything is correct, you do not need to submit a separate return. But before accepting it, you should still log in to SARS eFiling and check the details carefully. If something is incorrect or missing, you should update and submit your tax return through eFiling. A few practical tips for tax season Before accepting or submitting anything, make sure you have the correct supporting documents on hand. These may include your IRP5, medical aid tax certificate, retirement annuity contribution certificate, investment tax certificates, tax-free investment certificate, donation certificates, rental income records and any other relevant supporting documents. Do not only look at the refund or amount payable. It is tempting to focus only on whether SARS says you are getting money back, but the more important question is whether the information behind the assessment is correct. Check that your personal details and banking details are up to date. Incorrect banking details can delay refunds, while outdated contact details may mean you miss important communication from SARS. Keep your supporting documents for at least five years from the date of submission, as SARS may request them later to verify your return. What to look out for on your investments Investment income is an area where clients should be especially careful. SARS may receive information directly from financial institutions, but you should still compare the information on your return with your tax certificates. Here are a few important items to check: Interest income Check whether all local and foreign interest has been included correctly. Even small interest amounts from bank accounts or money market investments can form part of your taxable income. Dividends and foreign dividends Local dividends are generally subject to dividends tax, but they may still appear on your tax certificate. Foreign dividends can have different tax treatment and should be reviewed carefully. Capital gains and losses If you sold or switched investments during the tax year, there may be a capital gain or loss. This can happen even if you did not withdraw the money into your bank account. For example, switching between funds can sometimes trigger a disposal for capital gains tax purposes. Retirement annuity contributions Make sure your retirement contributions are correctly reflected. If your contributions were more than the amount allowed as a deduction for the year, the excess amount may be carried forward and used in future years. Your notice of assessment, known as the ITA34, should reflect this. Tax-free investments Although growth and income in a tax-free investment are not taxed, your contributions still need to be monitored. Make sure your tax-free investment certificate is correct and that you have not exceeded the annual or lifetime contribution limits. Living annuity income If you receive income from a living annuity, check that the income and PAYE deducted are correctly reflected. It is also important to keep your tax affairs up to date, as SARS can recover outstanding tax debts directly from certain third parties, including income providers. Two-pot retirement withdrawals If you made a withdrawal from the savings component of your retirement fund, this amount is taxed at your marginal income tax rate. Your fund administrator should issue an IRP5 or IT3(a) certificate showing the withdrawal and any tax withheld. Be careful not to assume that the tax deducted at the time of withdrawal fully settles your final tax position. If you also earned other income during the year, such as a bonus, rental income or investment income, you may still have additional tax to pay when your return is assessed. A simple checklist before you accept or submit Before finalising your tax return, ask yourself: Have I checked my SARS auto-assessment in detail? Have I compared the SARS information to my actual tax certificates? Are all my sources of income included? Are my investment certificates reflected correctly? Are my retirement contributions correct? Have I checked whether any capital gains or losses apply? Have I included medical aid, donation or other allowable deductions where relevant? Are my banking and contact details correct? Have I saved my supporting documents? Tax season does not need to be stressful, but it does require care. SARS has made the process more automated, but the responsibility to ensure your return is complete and accurate still remains with you. Taking a few extra minutes to check your assessment properly can help you avoid delays, unexpected tax bills or corrections later. PJ Botha CFP ® CA(SA)