2020 is a leap year, which means there’s actually a February 29, or Leap Day, this year.
Some say that is the perfect time for women to propose to men, which is supposedly a popular Irish tradition, and in Italy, some refer to leap years as anno bisesto, anno funesto, which translates roughly to “leap year, gloomy year”.
Way to ruin the vibe, Italy.
Something that is actually important about February 29 is that it’s the final day of the South African tax year, and thus the final chance for South Africans to take advantage of their annual allowable tax-efficient investments.
We asked Consequence Private Wealth to give us the important details.
Tax-Free Savings Accounts
A maximum of R33 000 may be invested per person per tax year. Contributions are not tax-deductible, but all future growth and withdrawals are tax free.
This is an excellent option for children, into whose accounts parents and grandparents may invest, so that the lifetime contribution cap of R500 000 is reached as early as possible to maximise tax-free future capital growth in their hands.
Retirement Funds
Contributions to all Retirement Funds, whether Pension or Provident Funds or Retirement Annuities, are tax-deductible to a maximum of 27,5% of taxable income up to an annual cap of R350 000.
Additional contributions are not deductible but may reduce tax payable on withdrawal.
Section 12J Venture Capital Companies
These are higher risk venture capital funds designed to support smaller business growth. Contributions are fully tax-deductible but other factors such as a Capital Gains Tax and investment risk must be carefully considered.
There’s no time like the present to get cracking on those investments, so you might want to make sure you’re maximising those options above before the tax year ends.
Consequence Private Wealth are available to assist with ad-hoc contributions and advice and to assist those who want to start getting their financial affairs in order.
Give them a ring on 021 674 2222, or mail info@consequence.co.za, for further details.
