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tax free investment

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Tax Season: How to Maximise Tax Benefits

The end of the 2021 tax year, 28 February, is nearly upon us. This means it’s your last chance to take advantage of the tax benefits available to you.

They range from deferring tax payments to benefit you in the short term to optimising tax-free investments for the long term.

Let’s take a deeper look at how you can maximise your tax benefits before the end of the 2021 tax year.

Tax-Free Investment Account

Man smiling at computer

Opening a tax-free investment account is something every South African should be doing. Not only does it allow you to invest across multiple financial products, but all your returns are completely tax free!

This was introduced by the government in 2015 as a means to encourage people to save money. The investment amount is capped at a certain amount each year.

In the 2020 tax year, the cap was set at R33 000 per person. For the 2021 tax year, the cap was increased to R36 000. However, bear in mind that the lifetime limit of R500 000 per person remains.

So, if you haven’t reached your yearly investment cap, now is the time to take advantage of this tax-exempt investment opportunity. If you already have a tax-free investment account, then ensuring you’ve contributed your yearly amount is a wise move.

However, if you do not have an account, we recommend that you discuss this opportunity with your financial advisor. We can assess whether this type of long-term investment suits your current income level and debt situation, and aligns with your investment goals.

Contact us and we’ll take a look at your portfolio and advise you on the best way forward.

Retirement Funds

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Retirement planning is an important part of the financial process. It ensures an individual’s long-term financial health, but it can also provide great tax benefits in the short term.

One such advantage involves increasing the amount you contribute to your annual retirement investment. This can ultimately decrease your tax burden and increase your tax return.

An individual is permitted to invest up to 27.5% of their taxable income into their retirement fund per year. In addition, by making these extra contributions, you decrease the overall amount of tax that you end up paying each month. You’re essentially investing in your future using pre-tax money and also reducing the amount of tax you pay to SARS.

Not only is this a part of a major saving’s incentive, but it also provides tax return benefits to you in the short term. You’ll be able to claim back more on your annual tax returns by maximising your retirement contributions.

Section 12J Investments

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As an investor, it’s incredibly satisfying bringing in financial gains for you and your family. Investing in venture capital companies (VCCs) takes that sense of satisfaction to another level by encouraging taxpayers to invest in local businesses. The provision of tax incentives to individuals and the streamlining of the claims process has made it much easier for individuals to invest in the local economy.

SARS is now offering you the opportunity to claim a 100% tax deduction from your taxable income, provided you have invested in a VCC for five consecutive years. This began as a means to foster investment into small and medium-sized entities, which form a major part of the South African economy. Section 12J investments are a great way to support local, domestic businesses and to benefit from significant tax returns.

Make sure to discuss this with your financial adviser before making this type of financial commitment. There is a lot more to investing in a VCC than you’d expect, especially in comparison to a tax-free investment or retirement fund.

Expand Your Benefits Before 28 February

Smiling lady in blue sweater

It’s not too late to take advantage of these simple tax benefits. There’s still time to top up your tax-free investment account and your retirement fund, if you haven’t already reached your yearly cap.

It’s also never too late to begin your investing journey. There are many options available, each with their own unique tax benefits.

We are here to help you get the most from your hard-earned money while working toward your short and long-term goals. Tax incentives can provide the extra motivation you need to invest in your today and start putting away for your future.

Please do not hesitate to get in touch to find out how to make your money work for you.

+27 11 839 2302

info@maysure.za.com

1024 701 Maysure Financial Services

Sygnia Itrix 4th Industrial Revolution

Sygnia continue to make global technologies available to local investors.

Before the launch of the Sygnia FAANG Equity fund there was the Sygnia Itrix 4th Industrial Revolution. This fund allows local investors to buy into global technology stocks which track the Kensho New Economies Composite ℠ Index (KNEX). 

What exactly is the fourth industrial revolution?

In essence, an industrial revolution is defined as being a period of major industrialisation in manufacturing and a revolution in power. The first industrial revolution saw the mechanization of agriculture and textile manufacturing. The second industrial revolution was centred in the expansion and development of electricity, chemicals, petroleum, and all things that can be made and consumed using these. The third industrial revolution saw the rise of nuclear energy and electronics such as telecommunications and computers.

The fourth industrial revolution began the minute the internet became a reality and is rooted in the new technology phenomenon, digitalisation. Where globally, every single thing has the potential to connect to whatever else may potentially exist. This is giving the human race the opportunity to build a virtual world that works towards connecting everyone, everything and every process imaginable.

This is why the Sygnia Itrix 4th Industrial Revolution Global Equity ETF is so unique and exciting for investors. While it is a high-risk fund, it offers investors access to global companies whose core focus is new technologies and innovations that have the potential to transform the global economy in ways we have only imagined until now.

It captures the 21st Century Sectors that are propelling the 4th Industrial Revolution and fostering new industries that will transform every facet of our lives. The term “4th Industrial Revolution” has become widely accepted as the name associated with the concept of a revolution which will fundamentally change the way we live, work and relate to one another. It is characterised by the coming online of a range of new technologies that are fusing the physical, digital and biological worlds and impacting all disciplines, economies and industries.

But what exactly is KNEX?

It’s a US Analytics organisation, which is funded by companies such as Goldman Sachs, Google Ventures, CNBC, among others. KNEX essentially uses and understands big data and natural language programming, which they use to scan public information and financial statements online to identify the companies who are at the forefront of fourth industrial revolution. Each index focuses on different sectors, and includes companies producing and developing a wide range of technology that include robotics, space, cybersecurity, nanotechnology, genetic engineering, clean energy and so much more.

The objective of this portfolio is to provide simple access to investors who want to financially benefit from up and coming technologies. Sygnia suggests a minimum investment period of 5 years.

“In addition to tracking market indices, Sygnia manages the allocation between different sectors and indices in a dynamic manner based on its proprietary investment approach and methodology” – Sygnia

If you would like more information, get in touch with us.

Sygnia released the FAANG fund shortly after the 4th Industrial Revolution, you can read all about it here.

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The best things in life are (TAX) free…

We think that its pretty safe to say that South Africans have a long-standing legacy of being big spenders but maybe not the best savers. With a nation that includes the majority barely breaking through the breadline, it’s not an unfamiliar feeling to be left wondering how you’re going to make it through the month.

With extreme levels of consumer debt reaching record heights in 2015, the government took the initiative to introduce a ground-breaking concept – Tax Free Investment Accounts – an incentive to encourage long term household savings.

Since then, financial houses have created quite a buzz about the concept, promoting them at every turn, but what exactly are tax free investment accounts and how do they affect you as the tax payer?

Simply put, a tax free investment account is a type of savings account that allows you to invest your money across a combination of financial products such as unit trusts, fixed deposits, bonds and so forth. The main difference between this and traditional savings accounts is that all your income and returns are completely tax free.

The critical advantage of this type of account is that your growth or earnings are exempt from tax on withdrawal, meaning that you won’t pay any tax when you cash out your investment. You’re also able to reinvest your returns and they don’t count towards your annual or lifetime contribution limit. You’re free to withdraw from your tax savings account at any time you wish, however any replacement investment amount is treated as a new contribution and will therefore count towards your annual and lifetime limits.

So how does it work and are there Limits to Tax Free Savings Investments?

Current regulations allow for an annual contribution limit of R33,000 per tax year, with a lifetime limit of R500,000. Once you have reached your lifetime contribution limit of R500,000 no further investment in tax free savings account will be allowed.

Provided that you don’t invest more than R33,000 in total for the tax year, your investment can be spread across as many accounts as you like. It’s important to remember that the annual limitation can’t be carried over to the next tax year, you simply forfeit any unused amount and are given a new annual limit of R33,000 to invest in the following tax year.

A massive benefit is that if you’re a parent, you’re able to open a tax free savings account for your child(ren), but you need to be aware that any contributions you make to this account on their behalf counts towards their annual and lifetime contribution limit.

Choosing the best investment partner

The benefits and features of tax-free savings accounts in South Africa are pretty much standard, so the important part of choosing the best one for you would be to choose the very best advisors and planners. It is critical that you choose a provider who shares the same goals for your unique investment journey. Some companies are willing to carry greater cost for the sake of better customer experiences and others, will rather take the lower cost and the lower quality customer experience.

At Maysure, we understand that investment is so much more than a game of numbers. It is a personal journey that you and your loved ones are undertaking to cement the future for those most important to you. No two journeys are the same, and no two clients will receive the same advice from us. We listen, we talk, we plan – together. You are more than a client for us, you are an unwritten story that we want to help you write.

We truly believe that knowledge is power, and we want to make sure that you know exactly what your money is doing for you.

It is very important to understand Tax-free saving investments shouldn’t replace other types of investments. Keep your portfolio fluid and focus on all aspects of investing with a suggested priority list from your advisors.

You should never sacrifice your maximum retirement savings or reduce your other financial commitments to invest in tax-free savings accounts. Rather see them as a long term investment opportunity that needs to be nurtured and grown as each financial year passes. Another very important consideration to keep in mind is that Tax free investment contributions are NOT tax deductible like RA contributions are, so this needs to be factored into your discussions with your advisors.

As a human being, you know that you’ll have those days in life that you’ll be faced with unexpected expenses. And you’ll either be wishing you had some savings, or you’ll be thanking yourself for saving in the past.

So where to from here? Tax-free investment accounts are a fantastic long-term investment product. Do not use them for your day-to-day savings, do not use them for your emergency fund, do not replace your retirement annuity and do not go into debt to invest in them. Rather speak to us, let us look at your portfolio and advise you on the best way forward. Once all aspects of your financial planning are in order then let us create a road map for the best way to achieve tax free financial growth on further planned investments.

900 491 Maysure Financial Services

Maysure Financial Services: Company Profile

Since 2003 the founders of Maysure Financial Services have believed that life happens – whether we plan it, don’t plan it, save for it, don’t save for it, expect it, or don’t expect it…. It happens. But how your life has happened doesn’t dictate how it must be lived. It is simply a journey that you are on, and everything that you have experienced along the way has brought you to this point, and dictates the road you will take from here on out.

Whether you are at the beginning of your journey, or a long way down the path, a specialised team will help you set a firm financial focus and guide you as your journey continues, specifically when it comes to your retirement and estate planning.

Should you be of the Muslim faith, you will have access to a dedicated Muslim team that understand that your earnings must always remain wholesome and pure, this team will guide you with your Sharia Investments and estate planning so as ensure that your journey is sustained and nourished by that which is Halaal.

We believe that your savings are the first step on your journey to your future – we apply expert, large scale, corporate savings principals to your investments, whilst still maintaining the personal, hands on approach of a small firm.

Maysure Financial Services is built on 3 solid propositions:

Serving you – we want to show you how to take your existing wealth and with some uniquely adapted and personalised guidance, turn it into the ground where your future takes root, the ground where you can start saving towards your dreams, passions and goals.

Services that are adapted to your circumstances – they are inspired by your life. The financial service instruments that we offer are as varied as your journey, and your circumstances will determine which services we will offer you to ensure that your unique financial goals are reached.

An understanding of that which is most important to you – Planning your future financial security should not be taken lightly. Our intention is to make your journey one that ends in financial independence, especially because the path is can be so strongly determined by simple consistency. With the right amount of experience, a firm grasp of the latest technology and a personal, hands on approach, our goal is for you hold the key to financial freedom.

SERVICES

When we are inspired by life to make choices that benefit ourselves and our families, it can be very daunting. This is where Maysure’s expert team steps in.

Our range of financial planning services include:

Retirement Planning
We all dream of being able to spend our time as we choose to. It may seem like an inconceivable notion, but effective retirement planning is exactly that – The process of setting retirement income goals and making the decision to do whatever is necessary to achieve them, in order to live your best life.
Effective retirement planning is essential to ensure that you accumulate the necessary funds necessary to give you financial freedom when you no longer enjoy the advantage of receiving a salary.

Sharia investments and estate planning
Sharia law acts as a code for living that all Muslims should adhere to, and this applies to investments and estate planning too. All earnings are to remain wholesome and pure, and no investments should be used for “sin” industries such as alcohol, tobacco, pornography as well as what can be considered unethical industries such as gambling, arms and weaponry.
Being secure in the knowledge that your investments are Halaal and pure is essential to ensure peace of mind; allowing you to graciously reap the rewards of what you have sown.

Investments – Unit Trusts, Endowments and Tax Free
You can empower yourself greatly by understanding the tax on your savings. Different tax structures apply to different investments and knowing exactly what you have and what you’re going to gain is an integral part of financial planning.
Understanding your investment portfolio is essential to ensure that you really are getting the most bang for your bucks.

Life Cover
Life happens, whether we plan for it or not. Having sufficient life cover ensures that the legacy of love that you leave behind for your family is not tainted by financial worries. Life cover can be reinvested to provide your family with an income and also used to cover any outstanding debt that you may have accumulated.
Ensuring the financial freedom of those you love in the event of your death is essential to ensure that they will not be burdened by financial strain and live the life that envisioned for them.

Medical Aid
Life is a precious gift and a well constructed medical aid ensures that you are able to pay for any treatment expenses incurred with regards to your health and wellbeing, on both a day to day basis and an emergency contingent.
Comprehensive medical aid is essential to ensure that you will not be burdened with debilitating medical bills should you fall ill.

Estate Planning
Your estate is comprised of everything that you own – your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions etc. Estate planning is ensuring that your asset base is managed in the event of your incapacitation or death in an appropriate and financially savvy way.
Estate planning is essential to protect your loved ones, because without a plan in place, there could be a long-lasting negative impact on their future.

Offshore Investing
Offshore Investing allows you to spread your investment risk across different economies and regions. It also gives you access to industries and companies that may not be available locally.
Being strategic with your offshore investment is essential to allow you to make adjustments to your investment portfolio to accommodate the ebb and flow of well performing international markets and maximise your returns.

Fiduciary Services
Being in the position to leave a legacy is a wonderful gift, but it is also a complex one that must be thought through carefully. Fiduciary services help you preserve, grow and distribute your wealth the way you want, both during your lifetime and the lifetimes of your loved ones.
With a thorough fiduciary plan comes financial peace of mind, allowing you to focus on the important things in life – living it the best way you can.

We pride ourselves on a providing a personalised service because we are a small, tight knit team; but our investment tactics and guidance are based on solid corporate principals that are applied across the board, no matter the size of the portfolio.