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Tax Law Changes: Effects On Estate Planning

Within the South African tax sphere, changes are continuously made to ensure fair and balanced taxed households.

Every business owner, employee, and regular individual must be in the know regarding tax laws implemented in South Africa. We at Maysure Financial Services have a firm grasp on estate administration and the relevant tax laws. Keep reading to find out more about changes to tax and the related effects on your estate. 

What are the current changes to tax law?

Man writing in book

Proposal of exit tax on retirement interests (for now)

You may wonder what ‘exit tax’ means’? In simple terms, it is the tax that is payable (when you leave the country) on either foreign fixed property, trusts, shares, or unit trusts as well as similar investments. All of this forms part of the standard process for emigration.

The proposal of introducing an exit tax was drafted last year but has since been on hold. During this “hold”, no tax will be charged on the assets sold. As a result, now is potentially a good time to move for those looking to leave.

Conversations are still ongoing. as the proposal will be re-examined later this year. Here at Maysure Financial Services, we assist you to prepare for the future of your estate and retirement by planning according to what regulations and legislation are in place.

Use of retirement interest to obtain annuities

In the past, an individual could not acquire annuities upon their retirement. However, now, because of the amendment to the Income Tax Act, individuals can choose from different types of annuities. Retirement annuities are an excellent vehicle of income for retirees.

Estate duty

Estate duty should not be an unfamiliar term. Well, that is if you have written a will and made plans for your estate upon your death. 

There are no changes to the tax regarding this particular aspect of estate planning. But, it must be noted once a deceased person’s assets have been filed. This is essential because it is the ultimate duty of the executor to ensure the duty levied on the property of the deceased is paid.

Estate duty is charged on movable or immovable properties/assets of a deceased person. Among other responsibilities, the executor needs to know the value of these assets. 

At Maysure Financial Services, we offer estate administration services to ensure everything is distributed according to your final wishes and loved ones’ needs. 

Capital and income gains tax

Family laying on the ground

When you pass away, your tax expense doesn’t leave earth with you. SARS has the right to claim what is owed to them before any finalisation of an estate. These include income tax, capital gains tax, donations tax, and any other form of tax that may be applicable.

Capital gains tax refers to a tax that is not separate but forms part of income tax. A capital gain occurs when you dispose of an asset for proceeds that exceed its base cost. This tax is normally for companies, individuals, or trusts.

A resident of South Africa, as stated in the Income Tax Act 58 of 1962, is responsible for capital gain tax on assets that are located both in and outside South Africa.

Whistles a  non-resident is responsible for capital gain tax only on immovable property in South Africa or assets of a “permanent establishment”  in South Africa. 

Couple talking to estate administration consultant

How all of these tax laws affect your estate

Drafting an estate plan shows your loved ones that you care for them and understand the importance of planning. Tax laws make up an important part of estate planning which may affect your estate in the unfortunate but inevitable event of your death. 

In many ill-fated cases, families are left in devastating financial and emotional situations because of hefty tax penalties and red tape. A financial professional can help you to navigate the intricate web of tax regulations and stipulations. 

Changes are inevitable. It is how you plan around them that matters.

Man sifting through paperwork

If you need assistance in understanding Acts and Laws concerning your estate, don’t hesitate to call us.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Moving from a Bull to a Bear Market

The Maysure logo has a bull and a bear in it. This is no mistake.

The two animals which make up our icon illustrate how we partner with our clients during the good, the bad and the ugly when it comes to investing their money. Developing wealth over the long-term can feel overwhelming at times, especially in times of crisis, so its important to have a planning partner who understands your personal needs.

Long-term investing can be dauting and looking at a market such as the one we currently find ourselves in, every instinct can be to get up and run. To pull out all your investments because watching them dip dramatically is too much to handle.

When it comes to your current long-term portfolio, its important not to make any rash decisions without speaking to your advisor. A market like this might seem dangerous and terrifying, especially when it comes to your long-term investments, but all throughout history these are the markets where waiting it out for investors has worked out.

We currently find ourselves in what we would call a bear market, and having just been in a bull market, things can feel upside down.

A bull market is on the rise in a stable economy, and it feels safe. A bear market is unstable with stocks declining in value as the economy is receding.

One of the most iconic investors of our time, Warren Buffet made most of his money in a bear market. He is famously quoted on saying

“The investor of today does not profit from yesterday’s growth.”

“Be fearful when others are greedy and greedy when others are fearful.”

What goes down must come up, and when it’s down the price and value you pay for certain stocks and investments means that ultimately, when they go up again you will have more value in your stocks than you would have had if you purchased them during a bull market phase.

We believe now is the best time to consider investing in the Sygnia Life Berkshire Hathaway Fund.

This innovative and low-cost fund gives South Africans access to the global investment powerhouse Berkshire Hathaway Inc. Run by two iconic executives: Chairman and CEO Warren Buffett and Vice-Chairman Charles T. Munger.

More on the fund

Berkshire “A” shares are valued at over four million rand per share, this means that the stock has a high average annual growth rate. It was previously closed to a small group of investors, but you now have the opportunity to invest in this fund through the Sygnia Life Berkshire Hathaway Fund.

Investing in a fund developed by someone who made his fortune off of markets like the one we are in, betting on that fund at a time like this could pay off.

Being in a bear market is ideal for someone who wants to invest and is prepared to ride the wave.

Get in touch with us if you would like to know more about this fund.

If you would like to discuss this further, feel free to get in touch with us.

☎️ +27 11 839 2302

📧 info@maysure.za.com

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Blog: How to go digital with your financial planning

First things first, the world around us has changed, and most importantly, we have to look at how to adapt accordingly in the various areas of our lives.

Many people have found themselves in a position where they are attending online or virtual meetings for the first time! There are so many teething pains in terms of how we use tools like Zoom, Microsoft Teams, and Skype. Not always knowing the answers or how to use these tools can seem intimidating, but we have to be prepared to change our way of communicating so that we can adapt and thrive during this time.

Discovering new ways of connecting professionally has led to many children and pets inadvertently attending our meetings. Maybe you are one of those professionals who have had this happen, and at the time it’s quite distracting and embarrassing, but after the fact, it’s pretty hilarious.

We’re all seeing a new side of our friends and colleagues, and while these things may not fill in what’s missing – human contact, it helps us to all maintain our humanity, and our personal well-being.

Financial planning in this new digital era might seem daunting, most of us are used to discussing our financial plans face to face with our trusted financial planner, being able to ask all the questions and having them pop us as you go. While we might all miss that interaction, we can’t allow financial planning fall to the wayside because everything has changed.

With this in mind, we’ve put together a few pointers on how to stay connected with your financial advisor during this period and included links to videos that show how to use the three major virtual conferencing that will help to make your experience so much easier.

When it comes to your investments, updating or changing your policies, whether it be life cover, income protector, dreaded disease cover, or anything else, and if you aren’t sure what your policies cover, talk to us.

The most important thing is to keep in contact with us on any area of your financial planning so that we can work together to ensure your future is secured and no hasty decisions are made now that will be regretted later.

Now some of these points may seem pretty obvious, but just in case, here is a shortlist of how to go digital with your financial planning:

  1. Pick up the phone – if you have any questions you can call our offices, we can try to answer them right away
  2. Send an email with your questions

OR

  • Set up a Zoom/Skype/Microsoft Teams virtual meeting if you need more information

Next up, some instructional videos on how to use the various virtual platforms:

Zoom

Skype Desktop

Microsoft Teams

If you would like to discuss this further, feel free to get in touch with us.

☎️ +27 11 839 2302

📧 info@maysure.za.com

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Introducing the Sygnia OSI Fund

Sygnia have released an exciting new fund, the OSI (Oxford Sciences Innovation) fund. We’re excited because like their other products, it’s an innovative fund, but also one that creates change through Impact Investing.

What is the Sygnia OSI fund?

Sygnia deploys 100% of their capital to generate socially impactful and sustainable long-term returns.

The aim of the fund is have exceptional performance while changing lives by making the unaffordable and unachievable possible.

The focus is on Impact Investing.

What is Impact Investing?

This is a type of investment strategy which invests in companies and organisations who generate a measurable, beneficial social or environmental impact alongside a financial return for the investor.

Essentially, it means you can be part of the change you want to see, while making a return on investment.

More on the actual fund:

The portfolio invests in companies such as:

  • Evox Therapuetics – modifiers of exosomes to facilitate targeted drug delivery to organs such as, but not limited to the brain and the central nervous system
  • Osler Decentralised Diagnostics – they have created a diagnostic device that enables anyone to test for a majority of biomarkers from a single drop of blood
  • Ultromics AI of Echocardiography – their technology reduces the error rate in the diagnosis of coronary heart disease by more than 50%
  • Vaccitech – creating novel vaccines that elicit strong responses from T-cells. They are a clinical stage T-cell immunotherapy company developing products to treat and prevent infectious diseases

For more information on this fund feel free to get in touch:

☎️ +27 11 839 2302

📧 info@maysure.za.com

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What is Gap Cover?

In our last post we went over Medical Aid schemes, the different types of cover they provide and how they don’t always keep you covered.

That’s where a product like Gap Cover comes in.

What exactly is Gap Cover? It’s an insurance product that is used to cover the financial “gap” between what your medical scheme will pay for and what is left over, which is what you are expected to pay. It covers the shortfall so that you don’t have to, so to speak. Essentially it’s what’s needed in times of medical crisis and emotional stress, while our minds and emotions are spinning out of control, worrying about how we’re going to foot the huge bill at the end shouldn’t be what we’re most concerned about, it should not even feature in what we’re thinking. Getting better or being there for our families is what matters.

One of the most important things to keep in mind with Gap Cover is that it is used in conjunction with your existing medical aid, this means that in order to qualify for Gap Cover you need to already belong to a medical aid scheme.

While it is made to fill the gap, just like with medical aid and any other form of insurance, there are a few things to look out for.

Gap Cover won’t always fill the entire gap, if your medical aid only pays out 100% of the scheme rate, and your Gap Cover will fill in 200% of that rate, but the specialist is charging 500% of the medical aid rate, you are still liable for 200% of the fee.

So, it is vitally important to work hand in hand with an advisor who understands your needs, your current medical aid scheme and how to pair that with the right Gap Cover plan. And yes, just like medical aid schemes, there are different “packages” and plans which include a variety of extras.

What is covered by gap cover?

  • Medical expense shortfall – this covers the difference between what the medical service providers charge and what medical schemes will pay for treatments performed in hospitals and clinics. Policy dependent.
  • Co-payment cover – this covers your co-payments certain surgical procedures, scans and hospital admissions. Policy dependent.
  • Oncology benefits – oncology or cancer benefits generally offer a once-off lump sum cancer diagnosis benefit. There are also various cancer covers outside of lump-sum benefits. Policy dependent.
  • Internal prosthesis benefits – this would cover the shortfall in the costs of prosthetics. This is policy dependent.
  • Emergency or trauma cover – this would cover the financial gap between what your medical aid provider will pay and what the hospital’s casualty or trauma ward fees are, as long as the injuries are as a result of an accident or serious illness.

You could also be covered for shortfall on dentistry needed due to an accident, permanent disability, trauma counselling and more. Speak to your trusted financial partner to guide you through the options.

In South Africa Gap Cover won’t pay for anything your medical aid hasn’t approved, or any procedures that aren’t being conducted by registered healthcare professionals. Treatments which are excluded by your medical aid are not covered by your Gap Cover plan.

There is so much more we could add to this topic, but we don’t want to overwhelm you. If you have any questions on how you could benefit from Gap Cover, or if you have the right plan feel free to get in touch with us today.

For anything else, feel free to get in touch with us😊

☎️ +27 11 839 2302

📧 info@maysure.za.com

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Offshore Investing

Offshore investing may sound daunting to first-time investors and may still seem rather complex for the avid investor, but we are here to help you understand what it is, how it can benefit you, and the best way to go about it.

Essentially investing offshore gives you the opportunity to tap into different economies and regions, as well as access industries and companies that aren’t available to invest in within South Africa.

While global investment may seem like a better idea considering the current economic climate, investing offshore doesn’t mean that you will get the most bang for your buck. Returns depend on current global economic conditions and exchange rates, which you can prepare for together with your financial planner.

The benefits of offshore investments include:

  • Reduced risk because of the diversified portfolio
  • Access to a wider range of investment opportunities
  • The ability to grow your money across global industries, companies and currencies not available in SA

When you spread your money across various markets and currencies, you minimise the impact of currency depreciation, political factors, market trends and events, which can have a sizeable impact on growing your wealth. Taking a portion of your investment out of the country means that capital loss risks are minimised as greater diversification is a key element in reducing risk when it comes to financial investments.

One of the major benefits of investing offshore is that you can reduce the emerging market risks that come when investing locally. SA remains an emerging market regardless of all the first world investment industries available to local investors. We are still a small fish in a big ocean, with an open economy that is illiquid and has a consistently volatile stock market.

A long-term view is required to fully benefit from offshore assets’ return potential. While investing offshore can seem attractive, it’s important to consider where the return from investment could come from, the exchange rate and/or the underlying foreign investment. The impact of the exchange rate needs to be strongly considered when it comes to foreign investment.

What is the best way to go about investing offshore?

This all depends on you as we believe that no two lives are exactly alike. We would need to look at your personal circumstances, risk profile and your long-term planning goals.

The answer depends on investors’ personal circumstances, risk profile and longer-term financial planning objectives.

If you would like to discuss the potential of investing offshore, get in touch with us and we can talk you through everything you need to know.

☎️ +27 11 839 2302

? info@maysure.za.com

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Property Portfolio Specialist

Maysure Financial Services is excited to welcome Prabir Paima to our team!

Prabir is a Property Portfolio Specialist and Property Professional who is experienced in services that include, property due diligence, business property strategies, to both property owners and aspiring investors.

With over 6 years of practical hands-on experience in multi-disciplines of the property industry, Prabir is resourceful and proactive in combining effective communication skills, with practical and theoretical knowledge to identify, acquire and manage feasible opportunities in the residential property market.

In Prabir’s most recent tenure, he acquired 733 units on behalf of a property fund which included sourcing the units, finance structuring for the plan, management planning, and future proofing of the acquisitions.


He played an integral part in managing a property portfolio valued at R800,000,000.00, which subsequently lead to the conclusion of two portfolio sales to a listed company with a deal valued at R750,000,000.00 consisting of 1 400 units

The cradle to grave exposure afforded Prabir with building a reputable rapport with funding relationship managers, property valuers and real estate advisory professionals throughout the industry.

Prabir has also successfully completed market studies, due diligence reports and technical property reports for external property acquisition and development projects.  

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Dreaded Disease Cover

Being diagnosed with a dreaded disease can have a severe emotional and financial impact on your family. While having dread disease cover won’t completely remove the impact of the disease on the entire family, it will lighten the emotional load by giving your family what it needs to keep going, security in knowing that the financial side of things will be covered.

Dread disease cover is an insurance policy that protects you should you contract one of the diseases on the predetermined list of illnesses with your policy provider. As the policy holder, once you have been diagnosed with a dread disease, you may be paid out a lump sum should you have the benefit on your existing policy.

The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that disease or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

“Henk Meintjes, Head of Risk Product Development at Liberty, said that more young people than ever before are being diagnosed with illnesses like cancer and cardiovascular disease. Cancer is the top claim cause at 24.3% [of our number of claims], and cardiovascular conditions a close second at 20%. And while cancer affects people of all ages, it was 16% for young achievers – the millennials – and 21% for young parents.” via Health24

Serious illnesses are a reality for us all, but the sooner you are diagnosed, the sooner you can act, and get the treatment you need. We are starting to see that dread disease’s do not discriminate, it doesn’t matter how old you are or what stage of life you’re at, anyone is at risk of contracting any of these diseases. While genes play a part, not everyone who contracts one of these diseases has a family history of the illness, this means that now, more than ever it’s essential to have a dread disease benefit to protect your finances should you contract a life-threatening illness.

With medical advancements you are more likely to survive a major health crisis, than to die from one, but the financial strain can impact your family, self-esteem and ability to keep going emotionally.

In 2018 PPS paid out R266,150,250.00 in cancer claims alone, with a total of R541,665,520.00 in sickness benefits that covered not only cancer, but diseases of the musculoskeletal system and connective tissue, diseases of the circulatory system, psychological illness and more. Refer to our post PPS: 2018 in Reviewfor more details on causes and conditions most claimed for last year.

These policies can cover you against cancer, stroke, coronary artery bypass, heart disease and more. Speak to your broker about what is on the predetermined list on your current policy or to apply for dread disease cover via your existing policy or through a new application.

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Retirement Planning: A Goal We All Hope To Achieve

Retirement is something that most of us have dreamed about since our youth. Perhaps you envision traveling the country and soaking up the best that South Africa has to offer. Maybe you want to whittle away your days at a house on the dam, fishing and enjoying nature. Regardless of what ideal retirement looks like for you, retirement is a goal we all hope to achieve.

Just wanting and dreaming to be retired isn’t enough. In order to retire and actually enjoy your time in retirement, you need the right amount of money saved, invested, or otherwise available once you stop working. The exact Rand amount you need to retire will vary greatly depending on your personal needs. It may seem incredibly daunting to be saving for an extended period in your life where you will have no steady income, but don’t worry, with a bit of sound advice and planning, the retirement of your dreams is well within your reach.

According to the national Treasury, only 6% of South Africans can afford to retire comfortably – and this figure has been the same for the past 25 years, which means that people are simply not planning for their retirement properly, leaving them and their families high and dry.

If you want to have a successful retirement, you need to figure out what that means to you. Do some life planning for retirement, set goals and create a plan that allows you to achieve your retirement goals. Here are some handy tips to remember when making your retirement plans that include financial freedom.

  • Start saving at your first job – Beginning to save for retirement in your 20’s and 30’s allows you to start generating valuable compound interest that will accumulate over decades. Tucking away even a small amount will get you into the habit of saving for the future. Don’t worry if you are only starting to save later in life, starting at any time is a step in the right direction. Remember, the best time to start saving for your retirement was yesterday.
  • Save with every salary cheque – Create a monthly debit order right from the start. If you make saving automatic, you won’t be tempted to spend it or forget to make a contribution.
  • As you earn more, pay more – As your income grows, increase the amount you contribute to your savings. Some saving plans even offer automatic escalation, which will gradually increase your contribution amount over time.
  • Avoid unnecessary fees – Some retirement and investment accounts often charge fees for breaks or early withdrawals. Get to know the rules so that you can avoid triggering fees and penalties.
  • Pay off your short-term debt – Your retirement investments should not be used to pay off debts that you acquired during your journey. Short-term debt is one of the things that could derail retirement planning, so paying it off properly, and without dipping into your nest egg is important. Contact us on how best to do this.

The most important part of retirement planning is understanding that it is a life long commitment. Nurture your investments, if you luck out on a major windfall, contribute a portion of that to your savings, keep up to date on interest rates and ask for advice on potential income generating investments.

We want you to live your very best life, at every single stage. Let us assess your financial planning to ensure that even though you might be planning for the best future possible, you are still able to live your very best now. With sound financial advice it truly is possible to have the best of both worlds.

Contact us today.

? 011 839 2302

? info@maysure.za.com

1024 683 Maysure Financial Services

Budgeting: How To Budget Effectively

Let’s face it, we have all read the funny meme’s about how long January feels, we all overspent during the festive season and we are all feeling the proverbial pinched purse strings, but managing your finances is really so much more than making sure you make it to the end of January.

Yes, we are about to bring up the most dreaded B word of them all – Budgeting. For most people, budgeting feels like a daunting task, but all it really means is that you’re forecasting a plan for your money to ensure that you’re spending with a purpose – although it might feel like it’s placing financial restrictions on you, it’s actually a process that is freeing up your finances so that you can enjoy that little bit of extra income when necessary, and it’s not just something to do over holiday periods – it’s an ongoing process that should eventually become a habit. Creating a tangible and reasonable plan for your money means that not only will you have an effective strategy when it comes to getting the things you want, but it will also keep you out of debt, or help you if you are currently working your way out of debt. It will also be able to help you pinpoint those months in which money may be a little tight and those months where you have a bit more financial freedom allowing you to even out those unpredictable highs and lows in your finances which can cause a whole lot of unnecessary, and unpleasant stress.

So how do you go about creating a budget that you can easily stick to? Here are 4 simple tips to help you get started.

  • Start with the most important expenses – Make a list of the true necessities, remembering that these might be different for different people. The basic ones are shelter, food, clothing and transport. Once you have listed the absolute necessities then you can fill in the rest of the categories that suit your lifestyle.
  • Be realistic about your wants and your needs – There is no point in doing a budget if you’re not going to be realistic in your forecasts. The more realistic you are about each of your numbers, the more likely it will be for you to stick to your budget.
  • Review and re-calculate – Writing down all your expenses allows you to see where you can cut out on bad spending habits, saving you money. It may seem daunting, but you need to accept that there might be a few items that you just don’t need (and maybe can’t afford) right now. Remember, your budget cuts are only temporary. You can always make adjustments later on down the road.
  • Include an extra category in your budget – Even putting aside a minimal amount every month towards those unforeseen expenses can make a difference. Start small and try increase this contingency amount each month. This money can be used in case of an emergency, such as a car repair or medical expense.

Now that you have an idea on how to get started there are some things to keep in mind. Remember that each month is different and factor in special occasions such as birthdays or holidays – these can affect your budget, so lay them out in your forecast as soon as you begin. Don’t forget your debt. Ideally, you’d want to start with the one with the highest interest rate, paying as much as you can every month. If you have other accounts, pay the minimum balances on those until you’ve paid off the first card, then choose the next card and pay extra for it while you pay minimums on the others.

The most important thing is to remember that life happens – whether we plan for it or not. It’s almost impossible to follow a budget 100% of the time, especially if it is your first time. No matter how disciplined you are, you may overspend time and again, so forgive yourself for small errors and get back on track, as soon as possible. Use your budget as a guide to make better financial decisions going forward.

We understand what a difficult juggling act it can sometimes be to manage your finances, so if you find the task daunting, why not contact us and we can guide you along the path to financial stability. It’s what we do, we are the experts and we want you to make the most of every hard-earned cent.

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