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Birds flying high, you know how I feel
Sun in the sky, you know how I feel
Breeze driftin’ on by, you know how I feel
It’s a new dawn
It’s a new dayIt’s a new life for me, yeah

It’s a new dawn
It’s a new day
It’s a new life for me, ooh
And I’m feeling good

  • Feeling Good (Anthony Newley and Leslie Bricusse)(1964)

Every 1 March brings on a new tax year and new opportunities for investors to review their financial plans and to take certain actions. Certain changes have been made to the tax laws which may prompt you to re-examine your plan, whilst certain other laws have remained the same.

What has not changed

Tax free investment accounts

The annual cap on contributions to tax-free investment remains at R36 000 from 1 March 2021, with the lifetime limit also remaining at R500 000.

Action: If you are still contributing less than R3 000 per month to a tax-free investment (per person), then you should increase your contributions immediately. If you contribute your annual limit in a single capital payment of R36 000, consider doing it as soon as possible. Remember that the longer it is in the market for, the greater the effect of compounding on that capital over time.

Capital gains tax (CGT)

The capital gains tax inclusion rate for individuals and special trusts remains at 40%, and for other taxpayers at 80%. The annual exclusion for a capital gain or loss granted to individuals

and special trusts remains at R40 000. The exclusion granted to individuals remains R300 000 in the year of death.

Action: If you have growth assets housed in companies and trusts, you should speak to your tax advisor about the appropriateness of these structures going forward.

Estate duty

Estate duty is levied on property of residents and South African property of non-residents, less allowable deductions. The duty is levied on the dutiable value of an estate at a rate of 20% on the first R30 million and at a rate of 25% above R30 million. A basic deduction of R3.5 million is allowed in the determination of an estate’s liability for estate duty.

Action: If you even think that you may have an estate of R3.5 million or more (on your worldwide assets), and you have not yet begun to consider estate planning, then you really need to make a start. Even if you are young and have a small estate there are sensible and cost-effective measures that you can take to ensure that you organise your estate in an efficient way. And while you are about it, when last did you review your Will? If it’s not current and something were to happen to you, your dependants may be left with a real mess to deal with when you are gone. You don’t want that.

Donations tax

Donations tax is payable at a flat rate on the value of property disposed of by donation. It is levied at a flat rate of 20% on the cumulative value of property donated since 1 March 2018 not exceeding R30 million, and at a rate of 25% on the cumulative value of property donated since 1 March 2018 exceeding R30 million. The first R100 000 of property donated in each year by an individual is, however, exempt from donations tax. This amount remains unchanged from last year.

Action: Have you considered making sure that you make use of the R100 000 exemption? You could use it for your children’s futures or a myriad of other ways.

What has changed

Personal income tax

An above-inflation increase has been made to the personal income tax brackets, which means that taxpayers earning above R216 200 will fall into the 26% tax bracket. The highest marginal tax rate for individual taxpayers remains unchanged at 45%.

The primary, secondary and tertiary rebates (deductible from tax payable) were increased to the following:

  • R15 714 per year for all individuals
  • R8 613 for taxpayers age 65 and over
  • R2 871 for taxpayers age 75 and over

Action: As a result of the changes to the tax tables, some investors may find that their after-tax income has increased, even though their gross remuneration has remained the same.  This provides a great opportunity to increase the amount you are investing each month so that you contribute more, but still end up with the same amount that you need after investing.

Contributions to retirement funds

In addition to the annual limit on contributions to your tax-free investment, you can still contribute up to 27.5% of your taxable income, capped at an annual limit of R350 000 to your retirement funds. (Contributions in excess of the annual limits will be rolled over to future years.). Very few employees contribute near this limit via their company-sponsored employee benefit schemes and there is usually an opportunity to increase the tax-deductible contributions to for example a Retirement Annuity Fund to make up the shortfall.

Action: Do you know how much you are contributing towards your retirement fund(s)? Do you currently contribute to a retirement annuity fund and, if you already are, have you reviewed whether you should be increasing your contribution? Do you know that by contributing to a retirement annuity you may be taxed on a lower taxable income amount and could receive money back from SARS at the end of the tax year. The income and capital growth earned on your investment until you retire is also tax free.

Your personal and financial circumstances

Life marches on and your personal and financial circumstances change. These changes can mean that your financial plan may need to be reviewed to take the changes into account.

Action: If there have been any material changes to your personal or financial circumstances in the last year (or so), it is incumbent on you to contact us and for us to review your financial plan together. What are ‘material’ changes? Call us and discuss what you even think may be relevant.


As we set forth in the new tax year, it is as good a time as any to sit down with us and review your financial plan and put in place the changes your plan will benefit from going forward.

Please call us and let’s get this year off on the right foot.