Are financial planners missing a trick?

Tax Fee Savings was introduced through legislation in March 2015 and is a new type of savings vehicle where savings could accumulate tax free and to encourage a culture of savings in South Africa. There are many advisers out there who are not making use of this fantastic product in their client’s portfolio. Out of billions invested in TFSA thus far, a larger percentage of business was done through banks, other non-financial institutions and online. 

The general features of a TFSA in terms of Legislation are:

Only natural persons (individuals) may invest in a TFSA.

The maximum contribution is R33 000 per tax year.

The maximum lifetime contribution per individual is R500 000.

Any contribution to a TFSA exceeding R33 000 per tax year will be taxed at 40%.

Premiums are not tax-deductible.

All growth in the plan is tax-free: i.e. no tax on interest, dividends or capital gains.

In addition to the above The Allan Gray, Absa and Kagiso Funds offer you the following:

  • Transparent fees and charges
  • You choose how you want to invest – with lump sums, regular investments or a combination of both
  • You have full access to your savings from day one – with no penalties
  • You can increase, decrease or stop your regular investments at any time
  • The choice of a range of selected underlying funds to meet your unique investment needs
  • The option to switch your underlying investment funds as many times as you like at no cost
  • There is no term attached to your plan, so you choose how long and how often you want to invest

The advantage you have of Investing in a TFSA through Anglowealth, is that you can choose between any of the major Fund Houses in South Africa. Almost every client should invest in a TFSA with a view to invest the maximum allowed each year and over their lifetime.  Whether you are addressing a short term or long term savings goal, or you are building an emergency fund, or you wish to supplement your Retirement savings – a TFSA should be one of the first products considered and very often can be the tandem product that you can tag on to any other investment you recommend. 

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