tax-free savings
Preservation funds are excellent for housing and preserving the proceeds of a pension or provident fund when someone is retrenched, dismissed, or resigns. Upon leaving employment, you can transfer your retirement fund capital tax-free into a preservation fund, where investment
If you are an individual investor, you can use your annual capital gains tax exemption, being the first R40 000 of gains made on your investment portfolio, to rebalance their portfolios if necessary.
A notable feature of LISP-based retirement annuities is that they are transparent, flexible investments that, unlike insurance-based RAs, allow investors to completely customise their contributions.
Investments are taxed in different ways depending on the nature of the investment vehicle, so it is important to understand what tax you will be liable for if and when you make a withdrawal from the investment.
If you are on maternity leave, you are able to claim unemployment insurance from the UIF provided that you contributed to the fund for a period of more than four months prior to going on leave. To qualify for the
As legislation currently stands, you can invest a maximum of R36 000 per year towards tax-free savings with a lifetime contribution maximum of R500 000 which, while not sufficient as a retirement funding vehicle, can be used to supplement one’s
Once you’ve maximised your retirement fund contributions, consider enhancing your long-term savings by investing through a tax-free savings account (TFSA). Or, if you already have a TFSA in place, consider maximising your annual allowable contributions.
Tax-free savings accounts can take the form of money market or fixed-term bank accounts, a unit trust investment or a JSE-listed exchange-traded fund, and can be issued by banks, long-term insurers, unit trust managers, mutual banks, or cooperative banks.
As a TFSA investor, you are permitted to invest up to R36 000 per year towards your account, with a lifetime contribution limit of R500 000. But, any withdrawals that you make from your TFSA will be deducted from your
