There’s been quite a bit of talk around the new tax free savings accounts (TSFAs)now allowed by Treasury.

We asked Consequence Private Wealth Director, Michael Furter, for some insights on this..

‘This is absolutely something you should invest in for each family member, given the tax free status of all growth over the lifetime of the investment. Current annual contribution maximums are R30 000 (R2,500pm) with a lifetime contribution max of R500 000, but we feel these caps will increase with inflation over the years, so don’t worry about using up your contributions too quickly. In fact the earlier you get to your lifetime max the better given that all future gains are tax free. The longer you’re in the market, the bigger those long term gains will be.

Having said that, we’re also asking clients to be patient on this over the next few months as our preferred fund managers are finalising their offerings . As always, it’s best to take time to look at all product options as underlying fees and fund choice will make a big difference.

We also don’t think it’s a case of cancelling existing investments just to fund this. Each type of investment, whether it’s the TSFA or conventional unit trust or share portfolio or retirement fund or endowment, has its own particular angle in terms of tax, access, estate duty etc. It’s often a case of playing with a number of strategies to get as much out of the system as possible through each phase of life.

Many clients want to know if they can begin investing in these for their kids and the answer is yes. There is no rule that limits how many people you can pay for.

Related to that last point is the whole tricky issue of investing on behalf of others. It sadly is not as easy as it should be. Investing for your own kids is one thing but we also get many enquiries on investing on behalf of godchildren, staff, friends who need help and so on. There are a number of ways to do it, some better than others. You need to think hard about quite a few things; who can access the investment and when ,what would happen to the value on your death, what the tax consequences could be. It’s definitely worth speaking to a decent independent adviser to see what the best options are.”

Ja, no lekker hey. If you are in the same boat as me, give Michael a call, he is a legend and will sort you out too.