This course explores the legal and tax implications of charging interest on debt. It addresses common law principles, donations tax risks, income tax rules under section 24J, SARS penalties, and anti-avoidance provisions. Gain clarity on when interest is deductible and how to stay compliant while managing financial transactions.
This session is designed to equip attendees with a comprehensive understanding of the legal and tax framework surrounding interest on debt. We’ll begin by unpacking the common law principles governing debt and the charging of interest, before examining when such interest may inadvertently trigger donations tax. We’ll then delve into section 24J of the Income Tax Act to understand how interest income and expenses are calculated for tax purposes. The session also explores how SARS may penalise incorrect interest practices and when interest may or may not be deductible under anti-avoidance provisions. Practical examples and case-based discussions will help translate complex rules into applicable guidance.
Key Topics Covered:
• Common law principles on debt and interest
• Donations tax risks from charging or waiving interest
• Section 24J: Tax treatment and interest calculation
• SARS penalties for interest-related non-compliance
• Deductibility of interest expenses
• Anti-avoidance rules and disallowed interest deductions
• Auditors
• Accountants
• Tax practitioners
• Financial managers
• Business owners seeking clarity on interest-related obligations and compliance under South African tax and legal frameworks.
