Please enable JavaScript.
Coggle requires JavaScript to display documents.
Tax-free Investments, images, images (1), images, images (1), images (2),…
Tax-free Investments
1. What are tax-free investments?
A financial instrument,
Approved by the Finance Minister,
via the Government Gazette.
*Regulations & requirements are set by the Finance Minister
2. Who owns tax-free investments?
A natural Person, or
An insolvent or deceased state of a natural person
*Insolvent/deceased estate = deemed same person as the natural person (for contributions made by that natural person)
3. Exemptions in tax-free investments
Rule:
Any amount from a tax-free investment,
received by or accrued to a natural person or their deceased/insolvent estate,
is exempt from normal tax
What the exemption includes:
Profit from disposal of tax-free investment
Income on the investment
4. Exclusions of tax-free investments
Capital Gain/Capital Loss
on disposal of tax-free investment
That are FROM the capital gains tax provisions
*if it's not from the CGT provisions, don't exclude
5. Limitations of tax-free
(T-F) investments
Contributions made by person MUST BE in cash
Exemptions for a T-F Investment limited to the contribution of;
R36 000 in year of assessment
R500 000 in total
*Income/proceeds from T-F investments
= Limit unaffected
*Transfer from 1 T-F invesmtent to another
= Limit unaffected
If there is more than 1 year of assessment in a 12 month period,
Still CANNOT exceed 36k in those 12 months
6. Penalties for
tax-free investments
If the amounts (36k in year of assessment / 500k in total) are exceeded;
40% of any excess amount willl be taxed normally
