08 Feb The Beginning Of The New Tax Year Is Almost Upon US….
The Beginning Of The New Tax Year Is Almost Upon US….
The end of February marks the end of the tax year – this is a fantastic time to take a closer look at your investments and take advantage of the incentives the government has put in place to encourage us to save.
To Make the most of this, tick all of these things off your list;
- Use your capital gains tax exemption
Capital gains tax (CGT) applies to the disposal of an asset on or after 1 October 2001. Internationally, such a tax is not uncommon, with many of South Africa’s trading partners having implemented CGT decades ago. All capital gains and capital losses made on the disposal of assets are subject to CGT unless excluded by specific provisions.
- Use your tax-free savings account allowance
A tax-free savings account (TFSA) can be a fixed-term bank account or money market; it can be a unit trust investment or a JSE-listed exchange-traded fund.
It guarantees your capital investment and is a great way to save for your goals because any interest, dividends or capital gains will be free of tax as well as giving you the flexibility you might need, as you don’t have to commit to making future contributions. You can withdraw funds anytime you choose, but it’s not advisable to do so.
- Get certification of your donations
Taxpayers – natural persons, trusts, companies, or close corporations – can deduct from their taxable income, the amounts they donated to approved organisations, up to the value of 10 percent of their taxable income.
For natural persons, the term taxable income refers to the taxpayer’s taxable income, whether derived from trade or from a non-trading source, and after allowing all permitted deductions, but before the donation deduction. Taxable income excludes any retirement lump sum benefit, retirement lump sum withdrawal benefit and severance benefit. However, it includes taxable capital gains. The donation must actually be paid or transferred during the year of assessment in order to qualify for a tax deduction in such tax year.
- Top up your retirement fund
Every year you are able to make a pre-tax contribution to your retirement funds of up to 27.5% of the higher of your taxable income or remuneration, capped at R350 000 per tax year. If you have not maximised this benefit, you can make an additional contribution to your retirement annuity (RA) in the form of a lump sum. If you are invested in your employer’s retirement fund, you can make an additional voluntary contribution (AVC), or you can start an RA in your own name.
- Claim for your Section 12 J investments
“Through Section 12J, of the Income Tax Act, SARS aims to stimulate the economy and promote investment in South African private companies, whilst providing tax benefits to investors. Section 12J is designed to encourage individual and corporate investors to invest in a range of smaller, higher-risk trading companies by investing through approved Venture Captial Companies.” Impact Investment Africa
For us at Morar Incorporated, this is all second nature. However, we understand that for some people, it can be quite overwhelming getting to grips with and dealing with the end of the tax year. Please don’t allow yourself to be weighed down with the extra burden, let us do what we do best so that you can do what you do best. Together let’s end off the tax year on a high note.