The Wealth Room


How to maximise tax benefits before the end of the tax year

Every year at around this time – ahead of the end of the tax year in February – we remind investors to think about taking advantage of some of the incentives the government has put in place to encourage us to save. Pretty much getting a discount of up to 27.5% on your taxes. 

The government offers incentives to save for your retirement in an official retirement saving product, such as a retirement annuity (RA). In return for putting your money away for the long term, you can invest in an RA and deduct the amount from your taxable income. In addition, while you are invested in an RA growth is free of dividends tax, income tax on interest and capital gains tax.

In March 2016, the amount you can contribute to your retirement funds tax-free was increased to 27.5% of taxable income or remuneration, capped at R350 000 per year.

Remember that RAs are available to everyone – whether you want to supplement your existing contributions to your employer’s pension or provident fund, or if you are self-employed.

You could also use a tax-free investment account to benefit from long-term tax savings.

In March 2015 the government introduced a tax-free investment (TFI) product to encourage us to save our after-tax money. You can invest R30 000 per year (up to a maximum of R500 000 over your lifetime) and benefit from growth free of dividends tax, income tax on interest and capital gains tax.

Contribution deadlines

If you are planning to make use of the tax concessions for this tax year by starting a new RA or TFI, or by making an additional contribution to an existing account your deadline will be 28 February 2017.




January 30, 2017


Grant van Zyl

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