What opportunities will tax-free investment transfers bring?
Transfers of these investments between product providers will be allowed from March 2018
On February 28 2017, the national Treasury announced that transfers of tax-free investments between product providers would be allowed from March 1 2018. A month later, the Treasury also published regulations in terms of section 12T (8) of the Income Tax Act to set out the transfer requirements between product providers. What opportunities, if any, will transfers bring for investors in these products? A 2017 Intellidex report titled “A Study of Tax-Free Savings Account Takeup in South Africa” shows investors had already opened about 460,000 accounts by February 28 2017, even though tax-free investments had only been launched two years before, on March 1 2015. By 2017, according to Intellidex, investors had contributed almost R5.2bn into different types of tax-free investment accounts. The report shows roughly 88% of assets under management (AUM) sat in cash (40.7%), life assurance products (26.5%) or collective investment schemes/unit trusts (20.9%). The new transfer legislation ena...
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