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Cape Town - A Fin24 user wants to know if his delayed leave payout following his company's liquidation is taxable.
He writes: "I worked for a company that was liquidated and 3 years later I received payment from the liquidators for leave, etc. Is this money taxable? Do I need to show it on my tax return?"
Piet Nel of the SA Institute of Tax Professionals responds:
The money would have been taxed in the year that it accrued. The amount you now received is merely in settlement of the amount that was owed. It is therefore not a receipt of income, but a repayment of a debt.
If the amount exceeds the amount declared in a previous return or is less than that, you will have to declare the difference as income or claim a deduction (as bad debt).
The leave pay may well not have been taxed earlier - we don't have enough information to comment on this.
* Have a question? Send it to us and we will find an expert to answer.
PLEASE NOTE: The important deadline dates in the 2015 tax season are:
September 30 2015: Manual/postal submissions
November 27 2015: At a SARS branch (non-provisional)
November 27 2015: eFiling (non-provisional)
January 29 2016: Provisional taxpayers via eFiling
ALSO SEE previous tax questions from users:
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Can I claim for using my own car for work?
Temp teaching for 6 months, must she pay tax?
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Can I claim for travel expenses?
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