Maximise Your Wealth Planning and Save Tax | MD’s Top Tax Savings Tips ahead of the Budget on 21st February 2024

Maximise Your Wealth Planning and Save Tax


1.  Donations: 

  • Donations made during your lifetime do not form part of your personal estate on death.
  • Annual donations made by you up to R100,000 are exempt from donations tax –
  • If you and your spouse each donate R100,000 per tax year to your Family Trust, your combined estate will be reduced by R1 million over a 5-year period. This translates to an estate duty saving of R200 000 – R250 000, depending on the size of your estate.
  • Donations to SARS-registered charities (Section 18A PBO) are tax deductible up to a limit of 10% of your taxable income. Any excess may be carried forward to the next tax year
  • Should the donation be used to fund an asset purchase, this may result in other tax implications that need to be considered. 

And you can achieve an even greater exemption benefit from the newly deemed donation rules contained in Section 7C if your Trust, or a company in which you or your Trust owns more than 20% of the shares. If your Trust or a related company, as defined, owes you more than R1 081 000 talk to us to make sure you take advantage of the Deemed Donations rules.


2.  Tax-Free Savings Accounts: 

All taxpayers are eligible to make annual contributions limited to R36 000.  This is in addition to the annual tax-free interest allowance for individual taxpayers.

This investment will be exempt from income tax on Interest, Dividends Tax, and Capital Gains Tax.

This is an important aspect of every person’s wealth planning so please discuss it with us and your investment advisor.


3.  Retirement Planning: 

Retirement Annuity Fund Contributions should be maximised – all pension, retirement annuity funds, and provident funds are limited to 27.5% of all taxable income.

  • The contribution deduction will be capped at R350 000 per tax year.

Maximise your retirement savings now and let SARS fund your retirement from pre-tax investments – especially ahead of the introduction of the new 2-pot retirement system to come into effect on 1st September 2024 when any new contributions will be subject to more onerous taxing rules and limitations!


4.  Review your Capital Gains Tax (CGT) and pay less potential tax:

  • Do you intend selling any personal investments before 29th February?
  • Have you had transactions that triggered CGT already this year? 

If you have not realised R40 000 in Capital Gains during the year, it may be to your advantage to sell and repurchase certain Capital Assets to reduce future Capital Gains Tax liabilities – Contact us urgently to plan your CGT.


5.  Section 12B Renewable energy allowance:

If you or your company has commissioned Renewable Energy interventions during the tax year, contact us to make sure we are aware of these facts and to ensure that you are in possession of the required documentation. 

If you have not explored these options, please contact us to make sure you are able to take advantage of the tax savings in the 2024/2025 tax year. 

We also have access to bespoke products allowing you to take advantage of this deduction to increase the return on renewable energy investments as an investment class.


6.  Manage Distribution due to changes in the Taxation of Trust Distributions to Non-Resident beneficiaries. 

With dramatic changes in the Tax legislation affecting Non-Resident beneficiaries of South African Trusts from 1st March 2024, proactive management could result in significant tax savings. Contact us urgently should this be applicable to you or your Trust.


7.  Do you, as the shareholder or as a person connected to the shareholder owe monies to any of your entities that have accumulated profits?

Contact us to discuss the most tax-efficient structure to avoid deemed dividends and unproductive interest claims from SARS.


8.  Avoid the cost of potential increased Dividends Tax Rate by declaring dividends prior to the 2024 Budget on 21st February 2024 – contact Danie, Fatima, or Juanita to discuss.


9.  Enterprise Development (including Supplier Development) and Socio-Economic Development Contributions:

If applicable to your business, please contact your B-BBEE rating agency to make sure that you make the appropriate Contributions as required.


The above is all part of extremely complex legislation, which is continuously evolving and subject to many rules. We would strongly urge you to talk to Alexis, Dave, Juanita, Fatima, or Danie before you take any action. 

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