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Provided by the South African National Department of Health
Take advantage of
current tax breaks
The end of the 2024/2025 tax year is just around the corner. While no one can predict what Finance Minister Enoch Godongwana will announce on the tax front in his budget speech later this month, it may be prudent to take advantage of the tax benefits still in place before the current tax year ends on 28 February 2025.
To make the most of the available tax breaks before 28 February, we encourage you to:
One way to capitalise on existing tax breaks is by contributing to a TFSA – you’ll pay no tax on interest, dividends or capital gains. TFSAs offer different investment options to suit your objectives and risk profile. Sanlam Private Wealth has three funds available to you to invest in a TFSA: the Sanlam Global High Quality Feeder Fund, the Sanlam Private Wealth Equity Fund and the Sanlam Private Wealth Balanced Fund.
In addition, a TFSA provides you with a unique opportunity to make use of your annual donations tax exemption to donate up to R100 000 (R200 000 if each spouse makes use of his or her exemptions) per year to your children without incurring donations tax. It can therefore provide you with an alternative estate planning tool, as the funds will be invested in your children’s names in a tax-efficient investment.
Investing in an RA is an excellent way to save on tax and give your retirement portfolio a boost – you won’t pay any dividends tax, and income and capital gains tax won’t apply to the assets managed. You can contribute to an RA even if you’re also contributing to a pension or provident fund.
Contributions made during a tax year to all South African funds – including RAs – are tax deductible up to a maximum of 27.5% of your taxable income, but subject to an annual ceiling of R350 000. Contributions in excess of these limits that have not been allowed as a tax deduction may be carried forward.
On 15 January 2021, President Cyril Ramaphosa signed off on new tax legislation likely to impact your RA and your preservation fund in certain instances if you decide to leave South Africa. Here’s what you need to know:
If you need any assistance with regard to tax-efficient investments, please contact your portfolio manager.
The formation and registration of trusts, and the provision of independent trusteeships – both local and offshore.
The creation of BEE, charitable, special and Shariah trusts compliant with regulatory and legislative requirements.
The administration of deceased estates in South Africa and abroad.
Advice on complex structures, asset restructuring and bequests in foreign jurisdictions.
Advice on emigration and immigration, foreign earnings and the application of any double taxation agreements.
Updating trust deeds to ensure they’re in line with the latest changes in the trust environment.
Updating and/or drafting of wills dealing with South African and/or foreign assets.
Advice on the establishment and management of charitable organisations, their tax status and tax deductible donations.
Advice on the potential tax consequences and reporting obligations if you hold a US passport or green card, or if you have children living in the US.
Guidance on the financial implications of life-changing events, such as getting married, divorce or the birth of a child.
Expert advice is crucial in dealing with cross-border estate and tax planning.
Stanley Broun has spent 13 years in Fiduciary And Tax.
Have a question for Stanley?
