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To Vince :TFSA

Super Contributor

I can't reply to your previous entry. When I try to I get diverted to my online banking site!

I found this on the internet (note:the amount has now incresed to R33000-00 per year as per yesterday's budget):

"How much can I invest?
Contributions to all Tax Free Savings and Investments (TFSIs) will be limited to R30 000 during any tax year and R500 000 over the life of an individual. Investments can also be made in the name of minors. It is accepted however that the balance in these accounts may exceed the R500 000 limit due to accumulated earnings and capital gains.

Service providers are not allowed to accept amounts in excess of these contribution limits. It is, however, the responsibility of the investor to ensure that these limits are not breached, failing which penalties apply.

If any person contributes in excess of the R30 000 in a year or R500 000 in aggregate in tax free investments, an amount equal to 40% of such excess shall be deemed to be normal tax payable in respect of the year in which the excess is contributed. Editor’s comment: Taxpayers should be aware that 40% tax is not on the returns but on the excess contributions"

Regular Contributor
To be honest. With the exception of dwt. I dont see any benefit of the tfsa account. In my opinion I think it is the biggest load of nonsense.

If you invest Long term the benefit can be signficant.

Check the bottom of the infographic for some numebrs we did.




Valued Contributor

which part of no tax is 'nonsense' ?

Regular Contributor

The part where you can only contribute 33000 (Currently) per annum to the TFSA account. If you had to contribute assuming R33000 per annum, it would take you 15 years to reach the cap amount of R500 000. CGT is capped at 30000 per annum and anything less than this does not attract CGT tax anyways. Interest on R60000 (if you contributed 30000 for the last 2 years) would also not attract tax as it is below the threshhold of R23800.

After 15 years who knows what the interest or CGT tax threshold would be. You would be better off putting off the whole 500K in a retirement annuity which the 1st R500 000 is already tax free 


Valued Contributor

why not both ? tax-ree is tax-free and more is always better ?

Regular Contributor
Yes I agree that the more is better. But wouldnt it be beneficial that you invest directly with satrix than with a tfsa without any limitations on what you can put away per year as cgt and interest will be exempt anyways if you had to put away the same yearly amount with the exception of dwt