Wrap up your tax year with astute financial advice

It always seems to come upon us when we are not fully prepared for it, but the end of the tax year is here once again. Many of us are not keen on dealing with SARS and so we place our tax returns and possible issues firmly in the hands of our accountants and auditors.

They may well ensure that we are always prepared at this time of year, regarding the necessary documentation etc. but do they always ensure that we have maximised our potential benefits from a financial and investment point of view?

This could be where you find the assistance of your Financial Advisor to be critical, as it is they who are focussed on increasing your wealth, and your tax structuring is very much a part of that. Aligning your investments with the best possible tax benefits is an essential part of wealth building and so it is prudent to always wrap up your tax year with astute financial advice.

Things to do before the tax year ends

Your Financial Advisor will be able to guide you and go into detail on this, but here are a few examples of important things you can do before D day (or should we say T’ day!) is upon us…

  1. Be prepared – This is the one your accountant (if you have one) will probably remind you about. Have all your necessary logging of your expenditure up to date and calculated so that you know exactly what it is up to this date.
  2. Maximize your Tax-free savings account (TFSA) – We are all allowed a R36,000 tax-free saving per annum but this needs to be maximised as at the end of Feb or before then. The contributions are not tax-deductible, but interest income, capital gains and dividends earned from a TFSA are exempt, so make the most of it. You have a lifetime contribution allowance of R500,000 and this is seen as a long term investment, so your Financial Advisor will be able to advise on how it can best fit with your portfolio.
  3. RA’s are king when it comes to tax savings – Retirement Annuities are the best investments that can be made from a tax savings point of view and they generally yield impressive returns too. Before the end of Feb, it is a good idea to add whatever additional funds you may have to your R.A.’s to increase your tax efficiency and potential rebates. 27.5% of taxable income or R350 000 monetary value maximums are permitted. The higher your marginal tax rate is, the more advantageous it becomes to invest in an RA as the % tax rebate is based on your tax rate.

There are many way that your savings and investments can be shielded against unnecessary taxation, so we suggest you review your portfolio annually and let your Financial Advisor ensure that every area of potential tax benefits is explored.

Making money is your business – protecting and managing it is ours

At Hereford Group, we take pride in the level of proficiency of our Financial Advisors to always ensure that whatever wealth you have created is not eroded by unnecessary expenditure and will always yield the maximum benefit for you.

The payment of taxes is very necessary but it is a complex issue and our clients greatly benefit from our expertise in this area, so contact us today to make sure you wrap up your tax year with astute financial advice!


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