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Investments that are tax beneficial - a #THREAD.
Righto, so everyone thinks that tax is the biggest killer of any investment. As @AndreBothmaTax graciously pointed out, even dying you will need to pay tax. There are some ways to pay less tax though - through investments.
Righto, so everyone thinks that tax is the biggest killer of any investment. As @AndreBothmaTax graciously pointed out, even dying you will need to pay tax. There are some ways to pay less tax though - through investments.
Property offers a tax break through Section 13 SEX, QUIN and QUAT. This is for specific areas, 5 or more properties or other breaks. More info here. https://frugallocal.co.za/2020/02/24/property-and-tax-incentives-within-south-africa/
There are also ways to pay almost no tax if your investment property has a bond, and your income and expenses match up. Note that you need to do your calculations properly!
A tax free saving account (TFSA) allows you to have any money you make be tax free (yeah, I know, with little tax issues on foreign dividends and when you die), but the compounding growth is basically tax free. And awesome. https://frugallocal.co.za/2020/03/23/the-tax-free-savings-account-tfsa/
Retirement annuities are not tax-free. They are tax-deferred. They also have generally high fees and low returns due to Regulation 28, forcing them to invest most of the money in SA. The general rule is if you don't reinvest your tax break, you're making a loss.
Section 12 J investments allow you to invest tax-free in one of the approved investment vehicles. It is a bit riskier, and you need to lock your money in these schemes for a long time. The fees are crazy, and generally, you need to put down large amounts of money.
If you invest in a bitcoin scam and cash your money out in bitcoin - it might be tax-free, but I don't recommend that. It's too risky.
The FSCA does not fully regulate crypto at the moment, meaning you can have a field day - as can scammers.
The FSCA does not fully regulate crypto at the moment, meaning you can have a field day - as can scammers.
If you have loads of money, you can consider hiring tax lawyers to help you pay less tax. These people specialise in moving money around in a LEGAL way to make you pay less tax.
Don't do anything illegal.
Remember: honest people don't do business with dishonest people.
Work with what you have.
And drink coffee.
Remember: honest people don't do business with dishonest people.
Work with what you have.
And drink coffee.
