Article by Satrix Investments

Recapping the benefits of tax-free investing 

                                                                                                                              Tax-free investing

Tax Free Savings Accounts (TFSAs) were introduced in March 2015, in a bid from National Treasury to encourage South Africans to save. Now in its third year, this National Treasury initiative is certainly being taken seriously by investors who realise that over the longer term, this tax saving will make a substantial difference to their investment returns.

An illustration of how much tax you could save over your lifetime of contributions


The initial contribution limit per tax year was R30 000 (as shown in the illustration above), but the recent February 2017 budget speech confirmed that this number has been increased to R33 000. So for example between 01 March 2017 and 28 February 2018 you can contribute any amount to TFSAs, as long as you don’t exceed the R33 000 limit. Remember there is a fixed limit per tax year and there is no “carry-over”. For example, if you contributed R20 000 last year, you can’t carry over R13 000 and contribute R46 000 this year, the limit is still only R33 000 per tax year.

There is no minimum amount, bar those imposed by the product provider. Satrix Unit Trusts have a debit order minimum of R500 per month, while there is no minimum investment amount for Satrix ETFs via the new SatrixNOW platform. All Satrix products are approved tax-free investment options.

Some TFSA quick facts:

  • Each individual can contribute up to R33 000 per tax year, with a lifetime contribution limit of R500 000

  • SARS will impose a tax penalty of 40% of the amount that exceeds the annual contribution limit of R33 000 per tax year

  • You can have more than one TFSA, as long as you remain within the limits above

  • All dividends, interest and capital gains will not be subject to tax

  • You can withdraw funds at any time, but bear in mind that any amount that you withdraw from your account will count towards your annual and lifetime limit

Satrix Managers (RF) (Pty) Ltd (Satrix) is an authorised Financial Services Provider and an approved Manager of Collective Investment Schemes (CIS) in Securities in terms of the Collective Investment Schemes Control Act, 45 of 2002. Satrix is the manager of the Satrix Unit Trust Scheme and the Satrix Collective Investment Scheme where the ETFs are listed on the Johannesburg Stock Exchange (JSE). CIS’s are generally medium to long term investments and the value of your investment may go down as well as up. Past performance is not necessarily a guide to future performance. CIS’s are traded at ruling prices and may engage in borrowing or scrip lending. A schedule of fees and charges and maximum commissions is available on request from the manager. There is no guarantee either with respect to the capital or the return of a portfolio. For both Unit Trusts and ETFs the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETF securities can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs are index tracking funds, registered as a Collective Investment. ETFs may incur additional costs due to it being listed on the JSE.

POSTED : 12 APRIL 2016

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