Investing tax free
Investing in our unit trust based Tax Free Investment (TFI) allows your client to invest R36 000 tax free each year, to a maximum of R500 000 in their lifetime, while enjoying all the benefits of a standard unit trust investment portfolio.
- 100% tax free investing: This means your client pays no income tax, dividend tax and capital gains tax on the allowed tax free amount.
- What is this for: The Government wants South Africans to save more and believes that offering tax-free savings and investment products will encourage more people to do this.
- How to invest: They can invest via debit order or a lump sum.
- Switches: They may also switch between unit trusts within their TFI account.
- Flexible payments: The client can make lump-sum or monthly investments, and they can stop or restart their payments whenever they like, without incurring any penalties.
- No time limits: They can leave their money invested for as long as they like.
- No tie in: They can sell their units at any time BUT if they have already invested R36000 for the tax year they cannot replace the amount they have withdrawn.
- Manage and transact: They'll be able to access their TFI via our comprehensive secure site where they can manage their account and transact online.
- Tax and administration: We will provide any documents needed for their annual tax return.
- Transfers: The client can transfer their TFI between financial services providers without penalty - but their overall investment amount in a tax-free savings product needs to stay within the R36 000 annual limit.
- Going over the limit: Investments that go over R36 000 per year will be taxed at 40% on the extra amount.
- Use it this year: Unused tax free investment amounts may not be "rolled over" to the following year.
- Withdrawals: If the client invests R36 000 in a year and withdraws R15 000, they have still invested their full amount for the year. If they reinvest R15 000 into their account, they will go over the limit and will incur tax on the extra R15 000.
- Distributions: Reinvested distributions do not impact their yearly investment limits – this is because investors are encouraged to reinvest dividends.
- Adviser fees: Payment of upfront or ongoing adviser fees are not included and therefore does not impact their yearly investment limit.
Our flagship unit trusts range of ten funds out of a total 40 unit trusts
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