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Take Advantage of the Tax Season

Published: 15/02/2021
 

Maximise your savings by taking full advantage of the tax breaks available to you for the tax year ending 28 February 2021. Invest in a Destiny Retirement Annuity or a Momentum Tax Free Saving Account utilising the Destiny Passive Portfolios before 28 February 2021 and choose from South Africa’s most innovative funds with the assistance of GIB’s financial planning team.

In a time of uncertainty, begin 2021 by benefiting from one of life’s certainties which is tax and the ability to benefit from tax breaks.

“Make the first financial decision of 2021 about you and your financial future, and the best one you can make – right now. After all, you and your future are your best investment and you can start now with as little as R500 per month." - Warren Flynn GIB Chief Investment Specialist.

“Most people don’t realise that their greatest expense is actually tax. They also don’t realise that they have the power to reduce that tax.” - Victor Bucarizza CFP® GIB Financial Advisor.

CONTRIBUTIONS TO A RETIREMENT ANNUITY ARE TAX DEDUCTIBLE

Money that you invest in a retirement annuity is deducted from your taxable income. So, for example, if you earn R500,000 a year, and contribute R50,000 to an RA during the year, you’re only taxed on R450,000 (this illustrates the principle only – in reality, your tax calculation will probably include other tax deductions).

There are limits. A maximum of 27.50% of your remuneration or taxable income (whichever is higher), and no more than R350,000, is tax deductible in a tax year. You can contribute more to your RA but after you’ve reached these limits, your contributions are rolled forward and automatically deducted in future years. Also, the limit applies to all your retirement savings combined (including retirement annuities, pension funds and provident funds). So if you contribute the maximum of R350,000 in total, and R150,000 goes to a pension fund at work, only R200,000 of RA contributions would be deductible.

“A perfect way to save towards your retirement and reduce your taxable income in the same year. Great way to make use of maximum income/tax deduction of R350k (27.5%) during the current tax year.” - Wendy Foley CFP® GIB Financial Planner.

“Less now means more later. This is twofold. A larger tax refund for additional contributions made to your RA in the tax year (now), and more money invested towards your long term retirement goal (later)” - Garry Hill GIB Financial Planner.

Should you wish to take advantage of this tax season, please contact us on the below and a GIB financial planner will contact you.

GIB Financial Planning
Email: finplan@gib.co.za
 
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