Don’t Leave Tax Savings on the Table
The tax year-end is fast approaching—now is the time to ensure your retirement annuity (RA) is working as hard as you do.
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Tax-Free Savings Account
You can invest a lump sum into a tax-free savings account (TFSA) before the end of the financial year. The annual limit is R36,000, and any person (including minors) can have more than one tax-free investment. There is also a lifetime limit of R500,000 per person.
Pension, Provident or Retirement Annuity Funds
You can deduct up to 27.5% of your taxable earnings (a maximum of R350,000) p.a. on total contributions to retirement funding, including a pension, provident or retirement annuity (RA) fund.
This can be done as a lump sum or by adding it to your existing RA, but it must be done before the end of February. Where the contribution to a pension or provident fund is made through your employer, the total (sum) of employee AND employer contributions count towards this deduction. This will result in you saving a significant amount on your annual taxes.
Donations & Capital Gains Tax
The first R100,000 donated each year of assessment by a natural person is exempt from donations tax.
If you donate, for example, R180,000 to someone, it will be judicious to split the donation between February and March to take full advantage of the R100,000 p.a. exemption. The tax rate for donations below R30mn is 20%, and for donations above R30mn, it is 25%. Loans are exempt, and donations/gifts between spouses are also tax-free. Contributions to a registered charity also allow you to receive a tax deduction.
Helpful Tools to Simplify Your Finances
Tax-Free Savings Growth Calculator
To summarize your multimember LLC, partnership, or corporation’s financial information.
Retirement Annuity Contribution Maximiser Calculator
We’ll need these tax documents and information to file.
Retirement Calculator
To summarize income and expenses from a rental unit
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