Author: Mareli Treurnicht (Senior Associate at Cliffe Dekker Hofmeyr). With effect from 1 March 2015, the South African Government (Government) introduced tax free investments (TFI). In this regard, the Income Tax Act, No 58 of 1962 (Act) was amended to introduce a new s12T, in addition to the notice and regulations published in the Government Gazette on 25 February 2015. Section 12T exempts certain taxpayers from paying normal tax on any amount received by, or accrued in respect of a TFI. Section 12T further states that, in determining the aggregate capital gain or capital loss of a person in respect of a year of assessment, any capital gain or capital loss in respect of the disposal of a TFI must be disregarded. Contributions to a TFI must be limited to cash, R30,000.00 in aggregate during any year of assessment and R500,000.00 in aggregate.
Author: Robert Laing (BDlive) Next year will mark the 20th anniversary of the JSE closing its Diagonal Street trading floor and switching to trading via computer screens and networks. Unlike Chicago, Frankfurt and many other exchanges, which kept their trading floors going as a backup while they eased into the new technology, the JSE decided to make a clean break from the past — a reckless leap, I thought, given how firm Telkom’s monopoly was and how bad its lines were back in 1996 when it had only recently split from the post office.
Author: Maarten Mittner (Financial Mail) The recently introduced tax-free savings accounts have received their share of criticism. However, industry experts say the benefits exceed the negative aspects, especially for younger investors. Individuals can choose from different types of investment funds from various financial service providers. One of the major criticisms of the products has been that the tax-free investment amount set for individuals is too low. A maximum of R30 000/year and up to R500 000 over a lifetime in capital gains, dividends, interest earned or on withdrawals from these accounts is nontaxable.
Author: Douglas Gaul, tax manager Grant Thornton Johannesburg Following much anticipation, tax-free savings accounts (TFSA) were introduced on 1 March 2015 as a way to encourage South Africans to save. Natural persons, as well as the deceased or insolvent estates of a natural person, can invest in certain approved tax-free investment vehicles.
This is a brief overview of this new class of investments which are available from 1 March 2015. Tax free income Section 12T of the Income Tax Act No 58 of 1962 and the related regulations provides that the total earnings (by way of interest and dividends) as well as any growth (by way of capital gains) will not attract income tax, dividends tax or capital gains tax in respect of these investments owned by a natural person or the estate of such person.
Author: Douglas Gaul (Grant Thornton Johannesburg) Following much anticipation, taxfree savings accounts (TFSA) were introduced on 1 March 2015 as a way to encourage South Africans to save. Natural persons, as well as the deceased or insolvent estates of a natural person, can invest in certain approved tax-free investment vehicles. What you need to know about tax-free savings There is an annual contribution limit of R 30 000, and a lifetime limit of R 500 000 to tax-free investments.This means that by investing R 30 000 per annum, an individual can build up a tax-free investment of R 500 000 over a period of approximately 17 years.
Author: Leonard Willemse (Mazars) The Minister of Finance, as an incentive to encourage household savings, introduced the concept of a ‘tax free investment’ with effect from 1 March 2015. A tax free investment is any financial instrument or policy administered by regulated institutions (such as banks) owned by a natural person and authorised as such by the Minister of Finance. In terms of section 12T of the Income Tax Act No. 58 of 1962 (‘the Act’) any amount received by or accrued to a natural person in respect of a tax free investment shall be exempt from normal tax. Furthermore, where any capital gains or losses are realised in respect of the disposal of a tax free investment, it should be disregarded in determining the aggregate capital gain or loss of a person.
Author: Lisa Steyn (Mail and Guardian) Finance houses have moved quickly to offer tax-free products made possible by the minister. Financial institutions have scrambled to provide the most attractive tax-free savings, ranging from simple bank deposits to investments exposed to the stock markets. At the beginning of this month, the government introduced tax-free investment regulations in a bid to boost household savings. Regardless of what form the tax-exempt investment takes, the regulations allow for contributions of up to R30 000 a year (an average of R2 500 a month) and no more than R500 000 over a lifetime.
On 20 February 2015, National Treasury issued a media statement indicating that the Minister of Finance approved the final notice and regulations introducing tax free investments, which came into effect on 1 March 2015. The preamble of the regulations, which should be read in conjunction with s12T of the Income Tax Act, No. 58 of 1962 (Act), provides some insight into the Government’s objectives in introducing tax free
Author: David Warneke, BDO South Africa Johannesburg, South Africa- Oct. 8, 2014 – A proposed section 12T to be inserted into the Income Tax Act will allow individuals to save up to R30 000 per annum, tax free. It appears that this concession will also apply to minor children. In order to encourage savings, in the 2013 Budget speech the Minister of Finance proposed the introduction of tax free savings accounts. The idea was that individuals could invest up to R30 000 per annum into such accounts, with an overall lifetime ceiling of R500 000. Returns generated in the account would be tax free, whether by way of income or capital gains. The individual could withdraw the amount invested at any stage on a tax free basis.