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Forgive me, but I tuned out of last week’s budget speech by Finance Minister Tito Mboweni because I think we’ve suffered enough this year.

One of the standout aspects of the budget, and also one that received a great deal of pushback, was an announcement from the government that it was killing Section 12J tax breaks for venture capital investments.

In a nutshell, the incentive, which allows taxpayers to invest in start-up companies rather than paying income tax, will come to an end on June 30.

It was an unpopular decision, about a very popular incentive that has enabled individuals to possibly earn an income and have a holding in an asset (such as property) from money that would otherwise have been paid in taxes.

The incentive is being stopped because SARS doesn’t see the value in economic growth being produced, not because the incentive is not a good one for taxpayers.

What’s key to remember here is that the tax breaks still apply until June 30, 2021, and although the 2020/2021 tax year wrapped up on February 28, you can still take advantage of Section 12J until the midpoint of the year.

Investments made between now and June 30, 2021, will qualify for a 100% tax deduction for the tax year ending February 28, 2022, so you still have one more bite at the cherry.

For example, Flyt Property Investment’s Section 12J compliant property developments gives investors the full 12J tax deduction, allowing them to put this saving/refund towards their property purchase.

This means you can get a tax refund of up to R450 000 for every R1 million invested in Flyt’s property developments in Cape Town and Stellenbosch.

Flyt brought three developments to market in the 2021 tax year – Quivertree in Stellenbosch, WINK Foreshore in Foreshore, and Eaton Square in Diep River, all of which were fully sold out in February (in fact, the partnership fund was oversubscribed).

They are yet to launch their 2022 projects but given their innovative loan products, we don’t expect these to hang around very long when they do, so watch this space.

We’ve crunched the numbers before, to show how you come out on top with a R2,5 million, R1,5 million, and R1 million investment, thanks to the SARS tax refund, but the simplest way to get informed is to have an expert talk you through the process.

It’s also important to remember that for those who don’t have money for the initial investment on hand, there’s 100% financing available through Flyt.

To take advantage of this massive tax break before it ends, or to find out more about how it all works, head here and register your interest.

[source:moneyweb]