Tax Tips
By BVK Group | 09 Feb 2024
Tax Tip: Must-Do Top Ups in February
RAs: The big one
Retirement Annuities (RAs) offer significant tax breaks as contributions to the investments are tax-deductible, and the growth within the funds is tax-free. (No income, dividends or capital gains tax applies.)
You can contribute a maximum of 27.5% of your taxable income to retirement funding each year, up to a maximum of R350,000.
The other bonus is that Regulation 28 now allows more funds to be invested offshore, which assists in geographical diversification and lowers the risk inherent in your RA.
TFSAs: Another important break
Tax-Free Savings Accounts (TFSAs) offer another tax break. You can contribute R36,000 annually with a lifetime limit of R500,000. The contributions are not tax-deductible but similar to RAs, the growth within the fund is tax-free.
The funds within TFSAs are not governed by Regulation 28, and the total amount can be allocated offshore.
The time is now
Please don’t wait until the end of the month to arrange your top-ups! There’s a bit of admin involved on our side, and we don’t want you to miss out.
If you have any questions about tax efficiency, please drop us a line.