What is a tax-free savings account?

Portfolio:

  • Unrestricted with regards to asset classes or managers ie. You may invest 100% offshore in this investment.
  • Some platforms may restrict your exposure to offshore assets.

Flexibility:

  • Complete flexibility including withdrawals at any time.
  • Debit orders and lump sums can be added and adjusted any time.

Although this should be seen as a long-term wealth creation tool and not a short-term instrument for “cash” needs.

Contributions:

  • There are current legislated limits to how much you can contribute:
    Annually – R 36 000.00
    Lifetime limit – R 500,000.00
  • Excessive contributions attract a penalty of 40%

Taxation:

  • There is no tax on returns in this vehicle. Including on payout.
  • It is, however, still included in your estate for estate duty.

Penalties – There should be no penalties payable on your investment for making changes detailed. Avoid any products that have penalties imposed or restrict your flexibility. Advice based fees combined with flexible investment products are available and give you more control in a world where change is inevitable.

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