The final dash to ensure that South Africans are making the most of the Section 12J action is well and truly on.
In case you’re playing catch-up, on June 30, 2021, South Africans can wave the Section 12J tax incentive goodbye.
Basically, Section 12J of The Income Tax Act provides South African taxpayers with a 100% tax liability deduction on the amount invested into a qualifying Section 12J fund, allowing South African taxpayers (individual, company or trust) to claim tax relief of up to 45% on the investment amount.
The dash is not without good reason, and whilst June 30 is within touching distance (you’ve almost made it halfway through 2021, well played), the sign-up process can be done in 24 hours, so it’s really not too late to get involved before the window of opportunity is shut for good.
In addition, securing that 100% tax deduction can also be secured through a loan.
Here’s Andrew Friedmann, head of sales at Anuva Investments:
“A big limitation to a Section 12J investment is that you need cash upfront to invest, so in order to save R450 000 in tax, for example, an individual needs to fund R1 million up front, in cash – not so easy to do.”
Anuva Investment’s Neill Hobbs has described Section 12J as “hands down the best tax-saving opportunity imaginable”.
Recognising the constraints this places on many, the Anuva team put their heads together and teamed up with accredited loan provider Flyt Property Investment.
Together, they have come up with a loan facility that affords qualified investors the option to finance up to 100% of their investment, and in doing so has opened up the 12J incentive to a broader base of investor than ever before.
Based on an investment of R1 million for a 45% taxpayer, here is how the investment finance facility can work:
- Anuva arranges up to 100% finance for qualified investors.
- SARS refunds the R450 000 via the Section 12J incentive and the loan immediately decreases to R550 000.
- The balance of the loan is settled with cash, a replacement home loan against the investor’s chosen
investment property, or a long-term loan from Flyt. - After five years, investors will have a fully paid-off investment comprising tax refund, investment returns, and the loan repaid.
- If property is not your thing, Anuva also have a 100% financed equity product; settled with the investor’s tax refund and a monthly debit order.
As you can see, there’s a reason that people are chomping at the bit to get involved before Section 12J ends on June 30.
It might sound a little daunting, but you can get the ball rolling by reaching out to Flyt Property Investment, who will send you a personalised investment summary and guide you through each step of the process to make sure you get in on time.
Consider it your reward for holding it together during the first half of the year.
