For those of us who enjoy a freebie, here is one which you should consider despite the maximum investment limits being relatively small
The Treasury announced the launch of its Tax Free Savings Plan initiative in March and financial institutions have been working hard on their TFSP offerings
Who is a suitable investor? Those who pay too much tax and who wish to invest for the long term (the tax benefits eventually add up to enhance your return after several years – the longer the better)
What is it not? A bank account
What can one invest in? Various collective investment scheme / unit trust funds (each investment house has its own selection of funds which have been made available for the TFSP)
Some of the Features:
No tax payable on interest, dividends or on the capital gain
R30,000 per tax year (equates to a R2,500 monthly investment)
R500,000 lifetime limit
If you make withdrawals you cannot replace the capital
NB Point: While this investment is liquid, it is not for those who wish to access their capital from time to time in the short term as this will erode the compound tax-free growth
This is a freebie from the taxman (he is not giving us tax payers many) – most of us can therefore use this offer to assist us to grow our capital for retirement or a long term goal.
Take advantage of this concession and do so every year!
