TFSA - Tax Free Savings Account

[Nel]

I see SBK OST offers various ETF's as investment options. Think it's a great savings tool. I like the BBET40 and maybe an ETF with only property exposure? Any thoughts?

[Nel]

Thanks Simon Brown, you made it easy for everyone to understand: http://blog.justonelap.com/tax-free-savings-accounts-tfsa/?utm_source=NL&utm_medium=email&utm_campai...

[Jughead]

Nel. Is it possible to open an account inside OST for this purpose?

[Nel]

Yes, go to Instruments - TFSA Enabled Instrument and then follow the prompts

[Blik]

Similarly you can open the TFSA on your normal online Bank account, but the same buy and sell regulations for the Auto Share Invest account apply to the TFSA account.

[Jughead]

Thank you. I've opened mine. I suppose the best investment in TFSA would be in high dividend yield instruments in order to save divi taxes?

[Blik]

According to SPB's infographic, Div Tax does not apply on the TFSA. I do question whether one would then have to apply for the Div tax amount back from the company, since they would deduct this before paying the dividend????

[geordie1]

i think another option worth considering is property shares where distribution is normally taxeable.I would hope that you would not have to apply for any tax back from company as they should be able to recognise that the account is tax excempt and therefore not take tax off.otherwise it would be an admin pain

[Creature_of_the]

Simon in your blog u say that no direct share trading will be permitted.But further down u say no indivi9dual share can be more than 10% of your TFSA..Is that 10% of R500,000 or R2500 per month or R30000 per year?..And does it mean you can buy shares but not trade them but must hold them for a specified period?...Im a bit confussed ..Thanx in advance.

[Creature_of_the]

I was thinking of taking 5 shares and investing R6k in each and leaving for the year or 5 years .Eg AGL, SOL, BTI,APN and Dsy or CApitec...Thoughts please.

[SimonPB]

you can't buy individual shares .. but you can buy ETFs and structured products .. Former can exceed the 10% limit, later can not

[geordie1]

thanks for info.I presume there are etf s that are only invested in property?my thinking is that these types of investments have had excellent capital growth and their distributions have generally been above bank deposits-to avoid tax on these distributions and the potential capital growth seems to me to maximising the potential of this offering.anyone see fault in my thinking