MD’s Top Tax Savings Tips ahead of the Budget on 22nd February 2023 – Maximise Your Wealth Planning and Save Tax
With the upcoming Budget on 22nd February 2023 and the end of the individual’s tax year looming on 28 February, the following comprehensive year-end tax planning guidance and “tax saving tips” can help you to minimise your tax burden and protect your wealth. Be sure to get in touch with us urgently to maximise these opportunities:
- 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 which 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, owes you more than R2 200 000.
To take advantage of this tax-saving opportunity before 28 February, contact us urgently to ensure that the correct process is followed.
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.
Top-up your retirement savings now and let SARS fund your retirement!
4. Review your Capital Gains Tax (CGT) and pay less tax:
- Do you intend to sell any personal investments before 28 February?
- Have you had transactions that triggered CGT already this year?
- Did they exceed the annual exemption of R40 000?
- Would the broker’s fees on selling CGT loss assets that offset the taxable gain be more than the increase in base cost should you re-purchase the investment the next day?
You could save R 7 200 per annum in tax before the cost of brokerage on the sale and repurchase of your investments that would otherwise be lost. Contact us urgently to plan your CGT.
5. 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.
6. Enterprise Development (including Supplier Development) and Socio-Economic Development Contributions:
Your company must make its enterprise development, supplier development, and socio-economic contributions by 28 February to maximise your entity’s B-BBEE ratings for the year if:
- The entity has a February year-end
- Turnover exceeds R10m
- Less than 51% of the shares are owned by black shareholders
For simple convenience and to maximise your ED and SED contributions contact CSI Link at firstname.lastname@example.org
The above is all part of extremely complex legislation,
which is continuously evolving and subject to many rules.
We strongly urge you to talk to Alexis, Dave,
Juanita, Fatima, or Danie before you take action.
+27 (0)21 683 4834 | email@example.com