ensemble, provider technology solutions for financial market participants, today announced the launch of Tax8, a Capital Gains Tax Reporting Tool.
Tax8 is designed to support the South African investment management community in calculating capital gains or losses subject to capital gains tax legislation, thereby informing investment decisions based on tax exposure.
A rules-based, matching engine powers Tax8, providing information on both pre- and post valuation date assets for the purposes of capital gains tax. These assets include interest bearing arrangements (24J), shares and units in a unit trust (listed, unlisted, local and foreign), options, futures, forwards, and interest rate swaps.
Tax8 offers the core evaluation methods that may be selected for the calculation of 'base cost` for assets, held on 1 October 2001. These methods are WAV (Weighted Averages); FIFO (First In First Out); as well as the SPID (Specific Identification) method, which includes LIFO and HIFO. The system then tracks asset movements in relation to 'base cost` in a consistent manner. Comprehensive reports are generated containing asset movements and portfolio values.
Tax8 calculates liabilities that are subject to capital gains tax for the following asset types: financial instruments including 'four fund` tax funds; Section 24J instruments; non-identical assets; options; foreign assets i.e. FCAs, FCOCs, FECs and other.
Commenting on the launch, Brian Anderson, Director, ensemble said, "With the introduction of the new tax legislation, Tax8 is a direct response to the requirement for a complex and flexible election and matching engine. While CGT Reporting systems have been developed, they are customised to and integrated with specific business needs and particular technology requirements. Tax8 meets the market need with a modular, standalone system designed to integrate with Back Office systems while allowing input and entry of relevant data from external systems."
Identifying the key advantages of the system, Anderson said, "Tax8 has been developed in close consultation with the South African Revenue Service, leading audit firms and industry specialists, to ensure an accredited interpretation of the Income Tax Act. Tax8 is comprehensive in its functionality, and its architecture will accommodate upgrades, according to annual amendments to legislation."
With its exposure to and knowledge of the financial markets, particularly the investment management arena, Anderson said of ensemble, "We were well positioned to develop an application to enable you to make relevant business decisions based on selection criteria that comply with the rules, as defined by Income Tax Act."
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