8 November 2016
All the proceeds – dividends, interest and capital gains – will be tax-free.
However, your overall contributions per tax year will be limited to R30 000. Any contributions exceeding the annual cap will be taxed at 40%. You will therefore have to manage your overall annual contributions carefully to remain within the limit. Unused amounts may not be rolled over, so it’s a case of “use it, or lose it”. While a lifetime contribution limit of R500 000 applies, the total value of your tax-free saving accounts, with all interest, dividends and capital gains, may exceed R500 000 over time.
Because contributions to a tax-free savings account will be with after-tax money, withdrawals will be tax-free.
You may withdraw money at any time, but legislation discourages unnecessary withdrawals: no amount withdrawn may be replaced. Every contribution you make counts towards your annual allowance and brings you closer to the limit, even if you are only putting back money you withdrew in that same year.
Sanlam Investments offers two transparent, flexible products with no charges if you stop or reduce your contributions.
Both products offer all the flexibility of a unit trust. The first is for investors who prefer actively managed funds; the second is for those who prefer passive investments.
The two products mentioned above charge no:
You will only be paying: