Here are some more answers to your questions about the amnesty for unauthorised offshore assets or grey money. Personal Finance has sent readers' questions to the amnesty unit, without disclosing their identities.
Q Please define grey money as it applies to the amnesty.
A
The amnesty for unauthorised offshore assets covers:
- Assets taken or accumulated offshore in contravention of exchange control regulations;
- Offshore income that has not been declared for tax purposes; and
- Domestic income, donations, or dividends that have not been declared for tax purposes and have been taken or accumulated offshore.
A list of the relevant exchange control and tax laws that people may have contravened is available on our website in the Tax Matters section.
Q Does the amnesty include any money left offshore or does the money have to be invested?
A
It includes all assets taken or accumulated offshore, whether invested or not.
Q Does it include assets that do not produce an income, such as cash, traveller's cheques, or a roll-up fund?
A
Yes, such assets may fall into one or more of the three categories listed earlier.
Q Do couples qualify for an allowance of R750 000 each - in other words, would a couple have R1.5 million between them?
A
Each person qualifies for R750 000, assuming that the foreign capital allowances have not already been used to make authorised investments offshore.
Q Do the assets declared therefore have to be in both their names?
A
This depends on whether they are married in or out of community of property and, if in community of property, whether the assets form part of the joint estate. If married in community of property, assets in the joint estate are automatically held by both individuals and both must apply individually in respect of their share of the assets that qualify for amnesty. Otherwise, the person who held the assets at February 28, 2003 must apply.
Q If the grey money investment is in an account in the joint names of a husband and wife married in South Africa under an antenuptial contract, must each apply for amnesty and each pay the levy?
A
Yes, each must apply in respect of their share of the account, as they are regarded as separate persons.
Q What if the money is held in the parents' and a child's names?
A
The parent and child must apply separately. If the child is a minor the parent must apply on the child's behalf. No foreign capital allowance is available for minor children, unless they are taxpayers in their own right and over the age of 18 years. From a tax perspective, any income received by or accrued in favour of any minor child of any person, by reason of any donation, settlement or other disposition, is deemed to be the income of the parent of such minor child.
Q Is it true that once you have applied for amnesty and paid any necessary levies, the assets you have declared must in future appear in the declaration of assets and liabilities on your tax return? This includes assets less than R750 000.
A
Correct.