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Pay less tax – sneaky yet legal tips and tricks

17 February 2020 11:59 AM
Tags:
Financial planning
Tax
Paul Roelofse
Personal finance
Kieno Kammies
Tax free savings account
ra
Capital gains tax
Certified Financial Planner
retirement annuity
tfsa
cfp
pay less tax
CGT
donation tax
Kieno Kammies asks personal finance expert Paul Roelofse (CFP) to share some opportunities to pay less before the tax year ends.

Also, read:

*How to get a tax refund from Sars

*How to get a nice, fat tax refund from Sars (a guide for business owners)

South Africa’s longsuffering taxpayers are, probably, not going to love Finance Minister Tito Mboweni’s Budget Speech at the end of the month.

For one, a VAT hike to 16% is possible, even likely.

Paul Roelofse, a Certified Financial Planner (CFP) discusses four opportunities that exist to pay less tax before the financial year ends.

Retirement annuity (RA) contributions

You can deduct up to 27.5% of your taxable earnings on contributions to your retirement.

In other words, if you contribute 15% of your salary to your pension fund at work you can invest up to 12.5% in an additional RA to get the full 27.5% deduction.

You must make the RA contribution no later than 29 February 2020.

Tax-free savings account (TFSA)

Think about investing a lump sum into a tax-free savings account before the tax year ends, suggests Roelofse.

You are permitted to invest R33 000 each year, so top up by 29 February to take full advantage.

Capital gains tax (CGT)

If you plan to sell some of your assets, considering doing so by 29 February to get the full annual exclusion of R40 000.

Sell again on 1 March to get another exclusion of R40 000.

Donation tax

If you intend to donate assets worth more than R200 000 to anyone other than your spouse, split the donation two.

You can donate R100 000 each year, tax-free.

So, suggests Roelofse, make one donation of R100 000 by 29 February while donating the second R100 000 on or after 1 March.

For a more detailed discussion on the opportunities that exist to pay less tax before the financial year ends, listen to the interview in the audio below.

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17 February 2020 11:59 AM
Tags:
Financial planning
Tax
Paul Roelofse
Personal finance
Kieno Kammies
Tax free savings account
ra
Capital gains tax
Certified Financial Planner
retirement annuity
tfsa
cfp
pay less tax
CGT
donation tax

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