The Launch of Allan Gray Tax Free Savings Account
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Tax Free Savings accounts (TFSa) provide South African investors with a new opportunity to save towards a specific goal or supplement their retirement savings. All interest, capital gains and dividends earned are tax free.
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investment limits
- Only a single TFS account may be opened under an individual investor’s name.
- Current annual (per year) limit: R30 000
- Current lifetime contribution limit: R500 000
- Annual audits monitoring the fund, track any amounts exceeding these limits (both annual and lifetime). If found to exceed the above limits are subject to a 40% tax payable.
- TFS accounts work on yearly cut-off. If investors wish to invest for the year of 2015/2016, they are required to do so before 14:00 on Friday, 26 February 2016.
eligible investors
- Individual investors of any age.
- Investors may also open additional TFS accounts in the name of other investors. i.e. Parents on behalf of children.
accessing the investment
- EFT transfers are prohibited. Contributions will be collected from the investor’s bank account through a direct debit. Safe guarding the investor from exceeding contribution limits.
- Withdrawals have no fees or penalties. Re-investments thereafter are considered as new contributions and the limits apply.
tax implications
TFS accounts are exempt from interest, income, dividends and capital gains tax.
On death, the investment is structured as a life policy. The investment will be payable into the investor’s estate. Whilst in the estate tax exemption still applies.
Global & Local fund selection and recommendation
Through a detailed analysis process of the funds available through Allan Gray, Global & Local would like to recommend the following mix of funds:
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