Tax-free Investment Accounts

A Tax-free investment, as the name implies, offers tax benefits:

You do not pay tax on the returns.
The interest, capital gains and dividends you earn are tax-free.

But, there are restrictions on how much you may invest:
The maximum limit per tax year is currently R 36 000.
The lifetime maximum limit is R 500 000.

SARS will levy a 40% penalty on the amount exceeding the limits.
A withdrawal from your investment does not increase your contribution limits.

May suit you if:
You want to invest for the long term, or
Paying income or capital gains tax on your existing investments.

The Tax-free investment which I support is an investment policy.
Issued within the framework of the Long-term Insurance and Income Tax Acts.

A useful product for estate planning purposes.
You may nominate one or more beneficiaries.
Your investment can be paid to your beneficiaries immediately.
There are no executor fees.
Included in your estate for the calculation of estate duty.

May not suit you if:
You are not paying tax on your existing investments, or
You are not investing for the long term.
Then a Tax-free investment may not provide significant tax benefits.

You may not take out a loan from or cede your Tax-Free Investment.