SwissFin – SwissSure Newsletter August 2019

Dear Readers,

We welcome you to the latest edition of our Newsletter.

Our National Elections in May have come and gone, so has the recent State of the Nation Address by President Ramaphosa. South Africans are eagerly waiting for a change and more importantly an eradication of corruption in the Government. Whilst the Zondo Commission is on its facts finding mission, there has been some silver lining on the horizon: Retail sales have increased in June year-on-year following another upswing of 2.7% in May, the Rand has been resilient, the property market shows small signs of improvement and the Reserve Bank announced at the end of July to cut interest rates by 0.25%. It is encouraging to see that the Governor, Lesetja Kganyago, is keeping his eyes on inflation and not politics. So let’s hope that our government is finding actions to stimulate our economic growth.

On a different note, the Department of Home Affairs has been under pressure from various angles and we finally see some action happening.

This and other useful articles across the board regarding short-term insurance, taxes, etc. can be found in this newsletter.

As usual, this newsletter can be viewed under https://www.swissfin.co.za/newsletters/swissfin-swisssure-newsletter-august-2019

Enjoy the reading, with best regards,

Your SwissFin / SwissSure Team

1. INVESTMENTS

• Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates

2. LOCAL AND INTERNATIONAL FINANCIAL NEWS

• Are off-shore life wrappers tax-exempt again?
• Panama Papers net $1.2bn for tax authorities

3. TAXATION

• Tax filing season has started from 1 August 2019

4. SWISSSURE: SHORT-TERM INSURANCE NEWS

• MUA Concierge service contact details
• Legislative requirements for Body Corporates
• Home Drive Service from Vantage
• In a motor accident: Towing sharks, storage costs and emergency lines
• Santam clients can register motor glass claims via the mobile App
• Change in pricing structure of MUA’s value added products
• The insurance costs of service delivery protests

5. IMMIGRATION

• Department of Home Affairs scrutinizes PR applications
• Another court case goes against the Department
• Department had to appear in front of the Human Rights Commission
• Points to consider when applying for a Critical Skills Visa (CSV)

6. OTHER

• Payments from overseas and bank charges
• Download our new company profile
• Domestic workers can now claim for injuries at work
• One of the world’s best restaurants puts Paternoster on the map
• The divorce rate in the Cape
• We value your comment

Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates >>

We offer the following rates as of August 2019:

Interest rates ››

The minimum investment R 250’000. Terms and conditions apply. The rates do fluctuate on a daily basis and the interest rate depends on the investment amount.

Insurance Plans: “Guaranteed income/growth plans” (5-year term), approx. 80% of income tax-free: ››

Tax-free interest income – maximum investment amounts: ››

R 1 456 000 for taxpayers under the age of 65
R 2 221 000 for taxpayers between the age of 65 and 75
R 2 525 000 for taxpayers over the age of 75

These figures mean that you can invest these amounts in i.e. our money market or fixed deposit offerings and not pay any tax. Couples married in community of property can double these amounts!

Underlying assumptions: 7,0 % effective interest rate and no other income sources.

SwissSure Forex Rates ››

The above table shows that our rates are very attractive compared to commercial banks. Over and above, we do not charge any fees when the funds are credited or transferred to another local account.

Should you wish to receive more information on our money market fund offering, the tax-efficient income plans or our forex offerings please contact Mr. Tony R. Hug on or Stacey Clemen .

Are off-shore life wrappers tax-exempt again? ››

You may recall these tax efficient structures that were offered by off-shore life insurance companies for clients with bank portfolios. In essence, the owner of such a “wrapper” was able to convert from an income tax liability (maximum currently 42%), to capital gains tax, which maximum tax is 18%. Unfortunately, SARS issued a private binding ruling a few years ago which disallowed the tax benefit.

Two years ago, SARS opened up the Voluntary Disclosure Program (VDP), for taxpayers with undeclared foreign assets. Some of the applications came from holders of offshore life wrapper policies.

It has now come to our attention that such applicants were not taxed according to the SARS ruling, but only on a CGT basis.

We therefore feel that one could consider the tax-efficiency of these wrappers again. We are currently engaging with experts and will keep you updated on future developments.

Panama Papers net $1.2bn for tax authorities >>

You may recall the data leak which was described as the ‘biggest ever blow’ to the offshore world.

The organisation that published 11.5 million documents leaked from Panamanian law firm Mossack Fonseca has confirmed that the global tally of fines and back taxes resulting for the exposé has passed $1.2bn.

The International Consortium of Investigative Journalists (ICIJ) reported updated figures from various tax authorities on Wednesday – three years after the data was made public.

The UK appears to be the biggest winner, having secured over £ 252m since the scandal broke in April 2016.

The French authorities confirmed nearly $136m has been recovered, with that figure expected to rise. More than 500 inspections have been carried out since April 2016.

Australia has been similarly successful, adding another $43m to take its tally beyond $92m; while Belgium added an extra $6.5m to reach $18m.

The data leak shone an unflattering light on the offshore practices of the wealthy.

This, in combination with the common reporting standard and other transparency measures, has undoubtedly impacted the ways in which individuals and corporations structure their wealth. The company Mossack Fonseca has since collapsed.

Tax filing season has started from 1 August 2019 >>

1 August marks the beginning of Tax Season. As from this date taxpayers can submit their Income Tax Return (ITR12) to SARS for the 2019 tax year (period 1 March 2018 to 28 February 2019). The deadlines are as follows:

• Manual returns: From 1 August to 31 October 2019
• Electronic returns (e-filing): 4 December 2019
• Provisional taxpayer with e-filing: 31 January 2020

Please also note that provisional taxpayers have to submit the second return by the end of August 2019. This year taxpayers who meet all of the following criteria need not submit a tax return: Their total employment income for the year before tax is not more than R 500’000, and

• They only receive employment income from one employer for the full tax year.
• They have no other form of income (e.g. car allowance, business income, and rental income, taxable interest or income from another job)
• They don’t have any additional allowable tax related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).

MUA Concierge service contact details ››

GlobalChoice has given us the following email address to use for any concierge queries: . Please no longer use the personal email addresses of staff at GlobalChoices as they might be on leave or not available.

Please note that the concierge service is only available to policyholders who live within a radius of 50 km of the major cities!

Legislative requirements for Body Corporates ››

We would like to highlight some very important points of the legislative requirements in terms of the Sectional Title Management Act:

Since the introduction of the Fidelity requirement for Community Schemes in 2016, most managing agents have in accordance with the legislation extended their scheme’s Fidelity cover to include the insurable person.
We do however, still come across schemes which have not updated their fidelity cover. Most insurance policies offer free standard cover of R 50’000 which does not comply with the new Act’s requirements as it specifically excludes Managing Agents.
It is therefore critical to ensure that all community schemes incl. body corporates, homeowners associations, share blocks and retirement villages have the extended Fidelity & Computer Crime Cover in place which extends to cover the insurable person.
Other important points are:

• Annual general meetings (AGM’s) must be held once a year within four months of the end of the scheme’s financial year.
• Regulation 26 in the Act details the requirements in terms of financial records, budgets, reports and audits.
• The fidelity sum insured must be recalculated following the AGM. Simply, the amount is calculated using the value of the scheme’s investments and reserves at the end of the last financial year plus 25% of the community scheme’s budget for its current financial year.
• Another new requirement in terms of the Act is the requirement that the audit of the body corporate’s financial statements must be carried out by an independent auditor within four months of the end of the body corporate’s year end. The definition of an auditor in terms of the Act is a person accredited to perform an audit in terms of the Auditing Professions Act,2005 (Act 26 of 2005).

For further information please contact our short-term insurance department.

Home Drive Service from Vantage ››

The insurer is following the market trend and has now also introduced a home drive service, which costs R 10 p.m. or R 120 on an annual basis.

Please click here to download the information letter.

In a motor accident: Towing sharks, storage costs and emergency lines ››

Recent claims have again highlighted the greed and unethical behaviour of tow truck drivers: One of our clients was told by a driver that he was authorized by the insurer to tow the damaged vehicle. The tow truck driver also promised that he would make contact with the insurer to sort everything out.

Unfortunately none of the above was true. Over and above the towing charges of R 1500, the tow truck driver charged an additional R 3000 per day for storage costs!

It is therefore of utmost importance that you have the insurer’s emergency number at hand so that the insurer can appoint the correct tow truck driver. Should you appoint an unauthorized driver, you could be liable for all the towing and storage costs.

Santam clients can register motor glass claims via the mobile App ››

We are pleased to share that clients can now register a windscreen claim in five easy steps on Santam’s mobile App. The process is quick and user-friendly.

Clients can take a photograph of their licence disk that automatically captures the vehicle’s VIN number and upload it with their mobile phone. The claim is assessed in real time and the glass supplier is notified to contact the client for fitment at his or her chosen location. This “straight-through” process reduces your waiting time and ensures a speedy response from the glass supplier in assisting the client.

We would like to encourage all Santam clients to download the app.

Change in pricing structure of MUA’s value added products ››

Please take note that the premiums of the insurers’ optional extensions and Value-Added Products will increase with effect 1 August 2019.

Please click here to view the summary.

The insurance costs of service delivery protests ››

According to the state-owned special risks insurer Sasria, violent protests have cost them R 1bn over the last 9 months.

The risk insurer showed that service delivery protests accounted for 76.6% of claims lodged with them in the year to end of March.

Sasria provides risk cover to individuals and businesses that own assets in South Africa.

Between 2012 and 2019, Sasria received more than 20 000 claims with a notable increase in the recent past, particularly between 2017 and 2019. The bulk of the claims received were from commercial businesses, predominantly from South Africa’s industrial and commercial hubs including the Western Cape, Gauteng, and the Eastern Cape.

It is important to note that these incidents are not isolated to one province or one town. They are happening across South Africa, and the momentum is increasing.

The number of claims increased by 32.4% and there was also an increase in severity.

Department of Home Affairs scrutinizes PR applications ››

It has come to our attention over the last few weeks that pending PR applications are under further scrutiny.

Applicants under the categories “minimum net worth” and “retired persons” are now required to disclose the contact details of the institutions where the assets are held.

Click here to view the enquiry form.

Whilst this enquiry delays the application process further, we are happy to see that the Department is at last working on long outstanding applications.

We are not sure if the Department is going to contact these institutions, especially in light of language barriers. We will keep you updated on future developments.

Another court case goes against the Department ››

Friday, the 28th of June 2019, was a huge day for foreign spouses and children of South Africans. The Constitutional Court ruled that it is unconstitutional to expect spouses and children to leave the country to change their visa status.

As our immigration legislation stands, the foreign spouses and children of South Africans on visitor visas cannot change their status in South Africa. Such persons have to return to their home country to apply for a spousal or dependent child visa. This means the family unit is broken up for as long as it takes for Home Affairs to process the visa applications. It could be weeks or it could be months.

Government was given 24 months to change the legislation but has acted swiftly and already issued a Directive to all South African missions abroad. They have to refrain from endorsing the visitor visas of foreign spouses and children of South African citizens and permanent residents with a condition that no change of status or condition is allowed.

The good news is that VFS accepts visa applications from within South Africa from foreign spouses and children since the first week of July!

Department had to appear in front of the Human Rights Commission ››

The Department of Home Affairs is under fire from the South African Human Rights Commission, which claims to have been trying to meet the department for more than a year to address complaints that the department takes too long to render services. The commission is investigating why applications for asylum seekers and permanent residence permits take so long to process.

The Department of Home Affairs appeared before the South African Human Rights Commission (HRC) on Thursday, 16 May 2019 after the commission issued a subpoena against the department. The commission said the reason for the subpoena was that the department had failed to co-operate with the HRC, as required by the Constitution.

The department claims it is unfortunately poorly resourced, which led to delays in processing. Between March 2018 and March 2019 there had been 742 resignations at the department.

The department also only has 22 adjudicators nationally to process applications. This causes a major backlog in processing the applications.

The Human Rights Commission said turnaround times for Home Affairs applications to be processed and verified was something that should be improved. Commissioner Angie Makwetla said people needed to be made aware of the status of their applications in good time “because a person can’t wait from 2016 to 2018 and not know what is happening”.

Jackie McKay, Deputy Director-General of Immigration, said Home Affairs did not have systems in place that could automate those updates, but he said it was currently working on a system that would make it more efficient.

It seems the HRC’s input has shaken up the Department and we see some applications being processed.

Points to consider when applying for a Critical Skills Visa (CSV) ››

When applying for permanent residency under the critical skills category, there are various criteria you have to meet.

The most important one is that you have 5 years’ appropriate post-graduate qualification work experience. This work experience doesn’t have to come from working in South Africa.

If you have the relevant work experience, you can apply for permanent residence straight away and there is no need to first apply for temporary residency. The problem though is the unacceptable long processing time of the Department, which could be up to 3 years! We therefore recommend going the visa route and then apply for PR in South Africa.

If you have less than 5 years’ experience, apply for a temporary visa and as soon as you have worked the remaining years in South Africa, you can apply for PR.

The CSV is the most promising way to obtain authority to work in South Africa. The Department will look at your qualifications, occupation, years of experience and registration with a professional body. The registration is a crucial part of the application and, in some instances, a huge hurdle to overcome. Registration can take years for some professions, such as engineers, nurses and medical practitioners.

Payments from overseas and bank charges ››

When paying insurance premiums or fees from abroad, please make sure that you cover the bank charges for the transfer. If you do online payments and you tick that the recipient should pay for the bank charges, you could find that you have no insurance cover, because the full premium was not received by the insurer!

Download our new company profile ››

Many of our clients are not aware of all the services offered by SwissSure and SwissFin. We have therefore compiled a short brochure which you can download here.

Domestic workers can now claim for injuries at work ››

Thanks to a recent landmark decision in the Pretoria High Court, domestic workers in South Africa will now be able to claim from the Compensation Fund for accidents and injury at work.

The ruling declares the exclusion of domestic workers from the Compensation for Occupational Injuries and Diseases Act as unconstitutional. According to Statistics South Africa, there are about one million people working as domestic workers in this country.

It marks a significant step in the tragic tale of Silvia Mahlangu’s mother, who drowned in the swimming pool at her place of employment after slipping on a roof while cleaning windows.

She was denied any form of financial compensation because domestic workers were not included in the Act.

There is some controversy over why it has taken the Department of Labour so long to make this adjustment to the act, especially after Labour Minister Mildred Oliphant published proposed amendments in October last year.

While this is amazing news for more than a million domestic workers in South Africa, the story is far from over for the Mahlangu family.

Now, the Socio-Economic Rights Institute – who is representing the family, will start proceedings in order to have the changes applied retroactively to provide much-needed relief to the Mahlangu’s and other bereaved families around the country.

One of the world’s best restaurants puts Paternoster on the map ››

Local chef and restauranteur Kobus van der Merwe put Paternoster, a small fishing village on the Westcoast, on the worldwide culinary map with his Wolfgat restaurant. The restaurant took home two prizes at the Inaugural Restaurant of the Year Awards in Paris.

The finalists were selected by a panel of 40 expert judges from all over the world. Wolfgat was awarded the “best off-map destination” and “restaurant of the year”.

The restaurant scored points for its original menu and focus on job security and sustainability. It serves local dishes enhanced by garden and wild herbs with seaweed. The restaurant can seat 20 people.

The divorce rate in the Cape ››

According to Statistics SA, the Western Cape has now the highest divorce rate in the country, with 23.8% of all marriages terminated. The findings show that 4 out of 10 marriages do not make it to the 10^th wedding anniversary.

The annual increase of divorces stands at 0.3%, with more female plaintiffs (60%) than their male counterparts. The median ages were 44 for men and 40 for females.

The highest percentage of divorces comes from black African groups with over 44%.

In 90% of all cases, a settlement agreement was found before the matter went to court.

We value your comment ››

Do you want to know about a specific topic, share something with us or comment?
Please feel free to send us an e-mail so that we can assist you.