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Tax-Free Investments - Coggle Diagram
Tax-Free Investments
What are tax-free investments?
Any financial instrument or policy as defined in section 29A administered by any person or entity designated by the Minister of Finance
Who owns tax-free investments?
Natural persons
Deceased or insolvent estate of a natural person
Limitations of tax-free investments
Contributions limited to:
R36 000
in aggregated during any year of assessment
R500 000
in aggregate over lifetime
Penalties within tax-free investments
Amounts in excess of limitations attract
40% normal tax
I.e. R37 000 deposit in year = R1 000 over limitation
40% tax payable on R1 000 = R400
Same with lifetime contribution limitation
Exemptions in tax-free investments
Any normal tax received or accrued in respect of the tax-free investment
Inclusive of
Income received from the investment
Profit on disposal of the investment
Exclusions of tax-free investments
Capital Gains Tax
on the profits or losses arising on the disposal of the investment
Dividends Tax
on the dividends paid in respect of the investment