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TAX FREE INVESTMENTS - Coggle Diagram
TAX FREE INVESTMENTS
What are tax-free investments
Any financial instrument or policy
Defined in section 29A
Administered by a person or entity
Defined by Minister of finance in the Government Gazette
Exclusions of tax-free investments
Section 12T(3)
Excludes any:
Capital gains
Capital losses
On disposal of Tax-free investments
From capital gains tax provisions in the Act
Penalties within tax-free investments
Contributions more than R36 000 per year
40% of the excess contributed deemed normal tax payable
Contributions exceeding R500 000 lifetime limit
40% of the excess contributed deemed normal tax payable
Who owns tax-free investments
A Natural person
The deceased or insolvent estate of a natural person
Exemptions in tax-free investments
Section 12T(2)
Exempts from normal tax
Any profit from disposal
Any income from investment
A natural person or his deceased or insolvent estate
Any amount received by or accrued to
Interest and Dividends
Interest is not taken into account when determining a persons interest accruals during a year
No dividends tax payable on TFSA investment dividends
Limitations of tax-free investments
Section 12T(4) limits contributions by the person
The amount in cash
R36 000 in aggregate during any year of assessment
R500 000 in aggregate