Financial services companies now have the benefit of a comprehensive capital gains tax reporting tool which is flexible enough to be fully integrated into their investment and securities management products.
Ensemble, a highly specialised technology solutions company operating exclusively in the financial services industry, has developed Tax8 in close consultation with SARS, leading audit firms and the financial services industry, as a standalone software or ASP package to assist companies with the complexities of the 8th Schedule of the Income Tax Act.
"Tax8 ensures an accredited interpretation of the 8th Schedule of the Income Tax Act because of the close consultation with all the relevant stakeholders and SARS during its development," says Brian Anderson, Director at ensemble. "It is a comprehensive and functional program where the architecture is such that it accommodates annual upgrades as legislation is amended."
Tax8 is a rules-based matching engine for the interpretation of the capital gains tax (CGT) legislation, providing information on both pre- and post-valuation date assets. It offers the core evaluation methods which may be selected for the "base cost" calculation of assets held after 1 October 2001, such as WAV (weighted average), FIFO (first in first out), SPID (specific identification), LIFO (last in first out) and HIFO (highest in first out). Tax8 then tracks asset movements and portfolio values in relation to "base cost" in a consistent manner, generating comprehensive reports as required.
Tax8 also calculates liabilities that are subject to CGT for the various asset types including, section 24J interest-bearing instruments, shares, unit trusts, options, futures, forwards, interest rate swaps and "four fund" tax funds.
Tax8 typically runs on Oracle9i Database, the preferred database for many companies in the industry. Says Anderson: "The Oracle-based system ensures that time-consuming, process-intensive calculations occur on the database side rather than on the application side, thereby enhancing efficiency and time management." He points out that the complexity of some of the calculations might require thousands of lines of code, but the fact that Tax8 can run stored procedures directly off Oracle makes it much more time-efficient and accurate.
Sage Life considers the ensemble, Oracle connection a wise choice
Ken Metcalf, Deputy General Manager at Sage Life Investments, emphasises the need for efficiently managing CGT within the ambit of the various tax funds to which Sage`s life assurance, savings and investment products are linked. "This entails ensuring that the assets and related transactions underlying the investments of our clients are managed effectively and efficiently in the relevant tax funds as well as compliance with the applicable taxation legislation.
"Sage Life selected Tax8 because of its ability to enable us to track transactions at both the tax fund and investment portfolio levels, providing us with an additional level of detail and flexibility," says Metcalf. "The ongoing support and updates make it a valuable package to assist Sage Life in our asset management process."
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