Happy New Tax Year

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26 March 2019
Happy new tax year!
Are you taking full advantage of the tax freebies and opportunities available to reduce your tax bill this tax year?  

They say two things in life are certain, one is death and the other is taxes.

Death is the unknown factor, taxes however are known well in advance of each tax year, thus allowing you to plan smartly and save on your tax bill and even invest tax free within limits.

The month of March is a perfect time to pause and take stock of your taxes and understand how these affect your pocket and investments during the new tax year. 

What is a Tax Year?

A tax year runs from 1 March to 28 (29 in a leap year) February each year and then starts all over again. So everything you earn or invest in between 1 March and 28 February each year will have some kind of tax implication.

Each year in February the Minister of Finance delivers the National Budget Speech and gives us all we need to know about the taxes that will apply in the new tax year.

Two Tax Saving Investments

There are a couple of ways to manage your tax affairs to take full advantage of rebates, concessions and exemptions available to investors.

Contributions towards a tax free savings account and a retirement annuity are two excellent ways which investors can use to help save on tax.

Each have powerful tax advantages and each certainly have a role to play in a well-oiled tax efficient financial plan.

A Retirement Annuity

All contributions (money) you make towards a retirement annuity fund during a tax year, up to certain limits, counts in your favour and helps reduce your tax bill.

All contributions you make to retirement funds up to 27.5% of the greater of remuneration for PAYE purposes or your taxable income can help reduce your tax payable.

For tax purposes you can’t exceed total contributions of more than R 350 000 in a tax year as these will not count for a tax deduction in the current tax year.

You can however carry the amount that exceeds R 350 000 over to the next tax year and they can count towards reducing your taxable income. 

These limits apply to pension fund, provident fund and retirement annuity contributions and is cumulative. That means the 27.5% limit includes all contributions a person makes to a pension, provident and retirement annuity in a tax year.

An example of the “tax-back” rewards of a retirement annuity:

Mr Chalk and Mr Cheese both 30 years old earned R 250 000 salary each in the 2019 tax year. Their respective company’s deducted and paid the tax to SARS (the taxman) monthly.

Mr Chalk contributed nothing towards a retirement annuity while Mr Cheese contributed R 20 000 in the tax year. Mr Cheese was rewarded with R 5 200 tax back to spend on himself and buy that new TV that he had been eyeing, cash! Mr Chalk bought nothing and got nothing and paid more tax in the tax year.


Not only are you saving tax by contributing to a retirement annuity, but also giving your future self the gift of enjoying a better retirement for the years when you are going to need it most.

Tax Free Savings Accounts

 A tax free savings account or TFSA allows you to save a maximum of R 33 000 per year, in a tax year, without ever having to pay tax on any withdrawals or growth made within the TFSA.

In fact there is absolutely no local tax payable in a TFSA if you don’t invest more than R 33 000 in a tax year.

The longer you invest, the greater your potential tax free reward and hence a wonderful investment to help supplement your income (tax free) in your retirement years.

Get Advice

Before investing in a retirement annuity or TFSA understand the mechanics of each and how they best fit into your financial plan. These are excellent products and when used wisely gives you a massive tax advantage.

If you are unsure how your taxes effect you, visiting a tax practitioner, or if earning a salary, speaking to your HR department can be a good start.

Our skilled OUTvest advisors can assist with any queries regarding our tax free investment plan. Give them a call on 0860 688 837 or check out our Fanancial Advisors page to learn more. 

Invest tax efficiently and enjoy a lifetime of tax-back rewards. Here’s wishing you a prosperous and happy new tax year.


Gareth van Deventer CFP®
OUTvest: Head of Advice
0860 688 837 
This article does not constitute holistic financial advice as it does not take into account one’s personal financial circumstances. Please contact OUTvest before implementing any financial plan or advice to ensure that you make an informed decision. Although we have tried to set out some key information to consider, we are not tax professionals and we suggest you speak to your tax consultant for any advice on your personal tax.
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