Student buying shares - SARS?

[sponge-bob]

I am a postgrad student with a bursury income of R95 000/year. I want to play around with some of this money on the JSE, but registering with any online share trader requires an income tax number.

Should I now apply for an income tax number from SARS whilst I, at this moment, have R0.00 deductable income? And if I do apply, will they bug me on the bursary income? I don't want to file out heaps of paperwork every year just to retain my bursaries...

Any help would be greatly appreciated. Any recommendations as to which online trader is the cheapest for small quantities would be appreciated.

 

[Bravestar]

Firstly earning R95000 per year you should register yourself for tax.

Do your employer pay PAYE or SITE for you?

Anyway, not sure about the bursary money but rather register yourself as a taxpayer before SARS gets hold of you

 

[Vrotappel]

You need to define the phrase 'bursary income'. Normally bursaries granted are tax free but there are exemptions.

Secondly of you are going to trade on the JSE you will have to register as a taxpayer even if you make nothing.

 

[sponge-bob]

I have never been employed and have no contract with any company, the bursary is awarded by the university based on merit. It is definitely not taxable, that was never even part of the question.

On the application form you have to give an estimated income. How the hell should I know this? (not even sure how much I will invest) Why do they need to know this beforehand?

 

[Bravestar]

I am a postgrad student with a bursury income of R95 000/year. I want to play around with some of this money on the JSE, but registering with any online share trader requires an income tax number.

Should I now apply for an income tax number from SARS whilst I, at this moment, have R0.00 deductable income? And if I do apply, will they bug me on the bursary income? I don't want to file out heaps of paperwork every year just to retain my bursaries...

Any help would be greatly appreciated. Any recommendations as to which online trader is the cheapest for small quantities would be appreciated.

There's your estimated income.

Except it's bursary money, I'm not completely sure how to tax bursary money and if it needs to be included into a yearly return... ?

 

[Gory51]

Wouldnt bursary money be given to you for study purposes, rental, food, transport, books , equipment/ study tools etc.

I dont know what agreement you have, but I am not so sure you can take bursary money and use it in trading.

Just asking as I dont know these answers myself

 

[Vrotappel]

SARS has got a draft Interpretation Note on the taxation of bursaries and scholarships:

http://www.sars.gov.za/home.asp?pid=677#

 

[MielieSpoor]

I am a postgrad student with a bursury income of R95 000/year.

Now I know why my fees at varsity was so high!! They pay people like you want I earn today after a three year degree and three years experience in one year. I is rediculous, and no one can tell me that it would cost nearly that much to pay for you yearly tution fees!

 

[sponge-bob]

Wouldnt bursary money be given to you for study purposes, rental, food, transport, books , equipment/ study tools etc.

I dont know what agreement you have, but I am not so sure you can take bursary money and use it in trading.

Just asking as I dont know these answers myself

Please note that I am a postgrad student with 2 (cum laude) degrees. Postgrad study costs less than 10k per year. The money is intended for research purposes, buying lab equipment, etc. However, if you can save some money buying equipment then you can burn the rest, for all they care...None of the postgrad students/research staff at the university pay tax on bursaries.

But judging by your response I guess SARS will try and tax me on it and then I will have a hard time explaining to them its a bursary before I can keep my money right?

 

[fskmh]

I also received a postgrad bursary before I got my term post. It was exempt from tax, and any other income I received was below the minimum taxable salary. I shoved any money I could spare into a money market account, didn't even consider playing with shares etc. (OT: I am seriously considering replacing my ABSA money market account with a Capitec or Allan Gray product.)
I was already registered as a provisional tax-payer because I had a full-time job that I quit before going to univ., (that's how I paid for undergrad).
I think you should contact someone at SARS, but I suspect you will need a tax-number, so some kind of registration is inevitable IMO.
AFAIK, whether it's a univ. bursary or NRF bursary/scholarship, it is bona-fide as described in the SARS Draft Interpretation Note of the Income Tax Act (the 4th item from that URL VJB 449 posted).

 

[sponge-bob]

I also received a postgrad bursary before I got my term post. It was exempt from tax, and any other income I received was below the minimum taxable salary. I shoved any money I could spare into a money market account, didn't even consider playing with shares etc. (OT: I am seriously considering replacing my ABSA money market account with a Capitec or Allan Gray product.)
I was already registered as a provisional tax-payer because I had a full-time job that I quit before going to univ., (that's how I paid for undergrad).
I think you should contact someone at SARS, but I suspect you will need a tax-number, so some kind of registration is inevitable IMO.
AFAIK, whether it's a univ. bursary or NRF bursary/scholarship, it is bona-fide as described in the SARS Draft Interpretation Note of the Income Tax Act (the 4th item from that URL VJB 449 posted).

Thank you, very helpful. Are there any Capitec/Allan Gray products you can recommend for a small investment (less than 30k)?

 

[fskmh]

Thank you, very helpful. Are there any Capitec/Allan Gray products you can recommend for a small investment (less than 30k)?

I am not a registered financial adviser, so we need to steer the thread away from where that is going .

What I will say is, you have to do your homework and check the various offerings. As a simple observation, (from one private individual to another), Capitec's rates for a daily savings account compare quite favourably with what I'm currently getting from my ABSA money market account:
http://www.capitec.co.za/products_savings.asp#rates

P.S. Have a look at this thread in another part of this forum:
http://mybroadband.co.za/vb/showthread.php?t=152322

 

[sponge-bob]

I am not a registered financial adviser, so we need to steer the thread away from where that is going .

What I will say is, you have to do your homework and check the various offerings. As a simple observation, (from one private individual to another), Capitec's rates for a daily savings account compare quite favourably with what I'm currently getting from my ABSA money market account:
http://www.capitec.co.za/products_savings.asp#rates

P.S. Have a look at this thread in another part of this forum:
http://mybroadband.co.za/vb/showthread.php?t=152322

Once again, very helpful,thank you!

 

[Gory51]

Please note that I am a postgrad student with 2 (cum laude) degrees. Postgrad study costs less than 10k per year. The money is intended for research purposes, buying lab equipment, etc. However, if you can save some money buying equipment then you can burn the rest, for all they care...None of the postgrad students/research staff at the university pay tax on bursaries.

But judging by your response I guess SARS will try and tax me on it and then I will have a hard time explaining to them its a bursary before I can keep my money right?

Didint mean to sound too negative there, was just asking from a different perspective as I have no idea about this and was curious too

Hope you get it to work out as you plan though . Good luck

 

[sponge-bob]

Didint mean to sound too negative there, was just asking from a different perspective as I have no idea about this and was curious too

Hope you get it to work out as you plan though . Good luck

No problem. You weren't nearly as negative as MielieSpoor..