Understanding the Assets and Liabilities Section in Your Tax Return
By Alicia Human · Updated
The assets and liabilities section in the annual tax return (ITR12) needs to be completed if you:
- earn self-employment income or are an independent contractor
- earn foreign income (e.g foreign rental income or foreign business income)
- are a Director of a company or a member of a Close Corporation
Each asset should be reported at its original cost — the amount you paid at the time of purchase or investment. According to SARS, these entries are not required to be 100% accurate, so estimates would be accepted.
In this section you should enter your local owned properties, vehicles, shares, loans you gave someone else, investments in the bank, crypto assets, total balance in your bank account at the end of the tax year and lastly, the value of any business related equipment (this would only be relevant for people running a sole proprietorship).
This section relates to all amounts you owe to banks, companies, businesses or people in South Africa.
In this section you should enter the value of your foreign properties, investments and any other assets you own abroad.
This section relates to money you owe to a foreign bank, company or individual.
It's important to understand that this section does not affect your declared taxable income and won’t result in penalties simply because you hold more foreign investments than local ones.
Assets in excess of R50m
If the total market value of your assets exceeds R50 million, SARS requires you to declare both their current market value and original cost. It’s important to provide an accurate market value estimate, as undervaluing your assets or liabilities may trigger an audit. This is because SARS compares the assets and liabilities reported with those from your previous year’s tax return.
