CAPE TOWN -Last month Intellidex released research that showed that a total of R257 billion had been invested in tax free savings accounts in the first 12 months that they were available.
The problem with this is that it will take years for investors to see any advantage from a TFSA if they are only using it to make a bank deposit. This is because tax payers already receive an interest exemption every year.
The best rates currently available on bank deposits in TFSAs are around 9percent. For anyone under 65 age to earn more than R23 800 a year in interest and therefore benefit from a TFSA, they would need to have R265 000 in their account. It would take a minimum of around six and a half years to build up that amount, even accounting for compound interest, since you can only invest R30 000 into a TFSA every year. It is therefore fair to assume that most people who have opened TFSAs at banks are actually not seeing any benefit from them.
Even once investors reach the point at which they are earning interest above the annual exemption, the benefits will still be very small, as this shows.
They need to have substantially more to see a worthwhile benefit. The exceptions would be those who are already earning interest above their exemption elsewhere. This is the case. Althougheven if it might be higher amongst pensioners, this is certainly a minority of those under 65 age.
In equities case, there would be immediate savings on the 15 dividends withholding tax applied to any distributions from companies. The benefits are even greater, as distributions from real estate investment trusts are taxed as normal income, with listed property. For those in the highest tax bracket, this would be 40. Given that the yield on listed property is a significant part of its total return, not having to pay any tax on this is therefore potentially a huge gain. That is interesting. Critically, you will also not pay any capital gains tax when you exit these investments, and this will be all greatest benefit. Simply put, the more growth you see, the more you will save in a TFSA, and over the long term cash will just never keep up.
SA, mines fight over proposed community revenue share http.
By 21st of October 15 treasury came with second report seeking more info from Power utility, says Eskom in a statement.
We in much deeper political malice than many would accept! No link doubt with #
The power utility provided Treasury with a Answer, by 15 September 2015 Treasury requested more information on their 1st draft report.