Tax Free Investments

Did you know that you are now able to start an investment that will be fully tax-free?  These tax-free savings accounts were launched in March 2015, as an initiative by National Treasury to encourage ordinary South Africans to seriously start thinking about saving.  The investments are available to individuals only.

In short, you are allowed to contribute R30,000 per year, tax-free.  This means that you will not be taxed on any interest, dividends or capital growth on your tax-free savings investment.  Total contributions over lifetime may not exceed R500,000. (We feel that this may be adjusted upwards in years to come, to accommodate for factors such as inflation.)

You will not be able to convert a current investment into a tax-free one.  You would have to withdraw from a current investment to start your tax-free one. Be aware that this could cause you to attract capital gains.  We suggest that you start your new tax-free investment by contributing on a monthly basis, anything between R500 to a maximum of R2,500 per month, alternatively an annual lump sum of R30,000 is allowed.

There are a variety of tax-free savings vehicles that are available, ranging from bank deposits to unit trust investments.  They have very competitive fee structures which allows for maximum growth over time.

The investment is also very flexible, as you will be able to draw from it at any time, without incurring any taxation thereon. 

You could be saving 15% on dividends withholding tax per year and approximately 33% on capital gains on your investment (at the current tax rates).

We are able to offer you a range of tax-free savings investments and will assist you in choosing the right one to match your needs.

To us it is almost a “no-brainer”, so do not hesitate to chat to us soon about starting your tax-free savings plan.