Tax Free Savings Accounts (TFSAs) were introduced in March 2015, in a bid from National Treasury to encourage South Africans to save. 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:
Initially the contribution limit per tax year was R30 000 (as shown in the illustration above) and at the February 2017 budget speech this number was increased to R33 000. So for example between 01 March 2018 and 28 February 2019 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 and Satrix ETFs are available via our SatrixNOW platform which has no minimum investment requirement - you can invest any amount you choose (up to the R33 000 annual limit). All Satrix products are approved tax-free investment options. SatrixNOW clients automatically receive a tax-free savings account upon registration.
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
POSTED : 12 APRIL 2016