Compliance
Navigating the 2026 Filing Season in South Africa: Ring-Fencing Rule & Auto-Assessment Changes
From 1 March 2026, SARS has updated the ring-fencing of assessed loss rules and introduced larger auto-assessment coverage—key changes for individuals, trusts and provisional taxpayers.
By NomadicTax Research Team • 5-8 min read • August 16, 2026
## What to Know About Filing Season 2026 Changes
### Ring-Fencing Assessed Losses – Section 20A Amendment
- For years of assessment **commencing on or after 1 March 2026**, section 20A (ring-fencing of assessed losses) now **applies from a marginal tax rate of 39%**, not the previous full maximum rate of 45%. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
- This means businesses or individuals whose taxable income falls below thresholds where 39% applies can carry forward assessed losses in many cases where previously they could not. It tends to **ease the burden on smaller high-margin traders**. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
### Auto-Assessments and Deadlines
- **Auto-Assessment Notices** issued between **1–12 July 2026** for individuals and some trust taxpayers. If you're auto-assessed and agree with the outcome, you do not need to file. If you disagree, you may correct and submit your return before **23 October 2026** (for individuals/trusts) or **22 January 2027** (for provisional taxpayers). ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
- New line items in ITR12 forms for:
- Declared interest income per account including DTA / section 10(1)(h) reliefs. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
- Assets disposed in partnership for CGT purposes (non-primary residence) to be disclosed. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
- A newly introduced **Recognition of Transfer (ROT)** validation: Returns can be rejected if a lump sum transfer or annuity purchase involves retirement funds where the receiving fund fails to send an ROT to SARS. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))
## Compliance Tips and Dos & Don’ts
- **Double-check auto-assessment notices:** While SARS aims to simplify compliance via auto-assessment, you must review them—errors in third-party data do occur.
- **Prepare supporting documents:** Especially for interest expenses Claimed under section 10(1)(h) or reliefs under DTAs, make sure you have per-account documentation.
- **For dispositions of non-primary residence assets via partnership**, document your share of disposals and retain evidence to avoid CGT surprises.
- **Watch financial year start dates:** The ring-fencing change applies from assessment years on or after 1 March 2026.
## Example Case
*Freelancer Tambo* made R2.5 million in taxable income during 2025/26 and incurred assessed losses in previous years. Under the old rule (45% rate), ring fencing prevented using those losses due to lower marginal rates. Under the new 39% rate benchmark, Tambo can use more of those losses to reduce their current tax burden.
Meanwhile, *Trustee Lindiwe* with simple income and no deductions received an auto-assessment notice on 5 July 2026. She agreed with the computed income, so she didn’t file. However, later she noticed a missing DTA relief line—she was able to correct before the deadline.
## Action Steps Before Filing Deadline
1. Log into **SARS eFiling** or the **MobiApp** to check whether you are auto-assessed or need to file.
2. Collect transaction-level statements for all bank accounts and taxable supplies, especially interest income.
3. If disposing property through a partnership, assemble agreements, deeds and records of your share.
4. If unsure about qualifying loss carry-forward under section 20A, consult a tax professional.
**Outcomes:** These changes make the system fairer for many mid-to-lower income earners, reduce administrative overhead, and place more emphasis on accurate reporting rather than punitive correction.
**Sources:** SARS Filing Season Changes announcement. ([sars.gov.za](https://www.sars.gov.za/latest-news/changes-for-filing-season-2026/?utm_source=openai))