Tax Tips

Each year new regulations and amendments aim to combat tax avoidance and ‘loopholes’ as a means of ensuring tax payers are contributing as much as possible to the fiscus.

However, there are still some clever ways to get your filings in order and save money when you submit.

Top up your retirement annuities

Up to 27.5% of taxable income, capped at R350,000 per year, may be deducted from your income in respect of retirement annuity contributions

Donate to the family trust

According to Goodwin, each individual taxpayer may make donations up to R100,000 per annum free of donations tax.

“If one is using a trust for estate planning (or any other) purposes, such donations might be made to the trust. This has the effect of lowering the personal estate and increasing the assets of the trust,” noted Goodwin.

“Both the taxpayer and spouse may make tax free donations as described, provided this is done before 28 February.


Use a tax-free investment account
In March 2015, the government introduced a tax-free investment product to encourage South Africans to save 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.”
Taking advantage of the Capital Gains Tax (CGT) exemption
All individuals are entitled to an annual exclusion of R40,000 on any capital gains earned during the tax year.
“By selling certain growth assets before year-end (e.g. unit trusts) and re-purchasing them shortly thereafter, the tax-payer can make use of this annual exclusion and increase the base cost of his or her portfolio.”
“By increasing the base cost of the portfolio, the eventual CGT on disposal of the assets is reduced. Of course transaction costs will have to be considered in making this decision.”