Contributions to a tax-free savings account are made from post-tax income and gives you the liquidity of a flexible investment.
You can withdraw from your investment at any time. Withdrawing funds, however, may prevent you from reaching your savings goals and will decrease your tax-free savings lifetime limit.
The total annual contribution in a tax year may not exceed R33 000 per tax year and your total lifetime contribution may not exceed R500 000.
A tax-free savings account is therefore an effective way to save for your goals as any interest, dividends or capital gains from your tax-free savings account will be free of tax.
Tax-free savings accounts can be used for the following purposes:
• Tax utilisation
• Long-term investing
• Supplement retirement savings
And remember it is compulsory to submit the investment information with an IT3(s) statement in your annual tax return issued by the provider.
Ruvan J Grobler