Tax Relief

Tax relief

E. Bendel
This is a summary of a workshop given by Eugene Bendel of Bendels Consulting. The association is trying to get him to give our parents a talk on this.
The most important message to be given to parents of children with disabilities is to keep record of all expenses regarding your child and all medical expenses paid for the rest of the family. NB keep all receipts and proof of payments!
The following is required to prove a disability:

  • Criteria as prescribed by the commissioner
  • SARS ITR-DD form must be completed. NB part C2 p.5: give a full description of everything that can be necessary to treat the disability, all interventions needed e.g. Horse riding, swimming lessons, etc. Do not just fill in Down syndrome or Autistic, etc.
  • The form must be completed by a registered medical practitioner. You can choose the most appropriate person for e.g. occupational therapist. Additional information by other practitioners can be added on separate letters, do not give too much information.

NB remember to get the practioners stamp on the form.
ITR-DD form is available on SARS website (www.sars.gov.za) or from any SARS office.

Tax benefits:
The following can be deducted:

  • Medical aid contributions
  • Claims not covered by the scheme (all family members)
  • Claims not submitted to the scheme ( all family members)
  • Expenditure incurred in consequence of a “disability” – anything paid extra to help the family and the child, school fees, travel expenses.
  • For full details of above mentioned, see “List of qualifying physical impairment or disability expenditure” Section 18 of the Income Tax Act, 1962

What is a family?
According to SARS: The tax payer, his or her spouse and children.

What is a child?
Taxpayer’s child/child of his/her spouse:

  • A person < 18 years old
  • A person > 21 who is wholly/partially dependant and not subject to tax
  • A person >26 and a student
  • A person that is dependant/ partially dependant on the taxpayer.

Tax refunds for prior years:
Objections can be made to tax claims for prior years, this must be done within 3 years after the claim was assessed.

Special trusts:
Special trusts can be created under the following circumstances:
Solely for the benefit of a person who suffers from:

  • “mental illness” as defined in Section 1 of Mental Care Act 2002
  • Any serious physical disability

Where such an illness or disability incapacitates a person from maintaining him/herself or from managing his/her financial affairs. This must be motivated by a medical practitioner.
NB make sure that a child with a disability remains a child for tax purposes until both parents have died. If the child earns a salary, the money must be paid into a trust to prevent the child from paying tax.