BUDGET SPEECH HIGHLIGHTS
VAT, Estate Duty & Donations Tax
- Increase in VAT (value-added tax) rate from 14% to 15%, from 1 April 2018
- Increase in Estate Duty rate from 20% to 25% for estates with a net value of over R30 million
- Increase in Donations Tax rate from 20% to 25% on donations of more than R30 million
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CGT & Dividends Tax
unchanged
- Capital gains tax (CGT) remained at 40%
- No CGT payable on tax-free savings accounts (TFSAs) & retirement products
- Dividends withholding tax remained at 20%. Not payable on TFSAs & retirement products
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Tax-free savings accounts and retirement funds
- annual contribution limit still R33 000 per tax year
- Overall lifetime limit unchanged at R500 000
- Contributions above the limits will be taxed at 40%
- Investors can invest 27.5% of their total salary or other income in retirement products every tax year and receive tax relief
- You benefit from RA tax deductions on contributions lower than R350 000
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Regulation 28
New offshore limits
- Investors are now able to diversify their retirement savings with up to 40% offshore
- Offshore (excluding Africa): 30% Africa: 10%
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Disclaimer:
This is not to be used as financial advice, and always consult with your financial advisor before making any decision regarding pension fund withdrawals or transfers. These tax implications are subject to change.
