7 ways for South African investors to be more tax efficient
Making smart use of financial products can improve investors’ tax efficiency
The 2017 Budget introduced a maximum marginal tax rate of 45% – the highest such rate for South Africans since the 1999–2000 tax year. Needless to say, this has received a lot of attention. Although the Treasury pointed out that it had not increased the inclusion rate for capital gains tax, the effect of increasing the marginal rate of tax still resulted in an increase in the effective rate of capital gains tax from a maximum of 16.4% to 18% for individuals and from 32.8% to 36% for trusts. The Treasury also increased the dividend withholding tax rate from 15% to 20%. Whether people become immediately aware of the effects or not, this has a real impact on South African’s tax burdens. It is now more important than ever to explore ways of incorporating tax efficiency into one’s broader financial planning, and the smart use of financial products can help improve investors’ tax efficiency. 1. Retirement annuities Retirement annuities (RAs) have been the subject of some (unfair) bad publ...
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