|South Africa Postpones Tax-Free Savings Transfers|
The South African National Treasury has agreed to postpone possible transfers of tax-free savings accounts (TFSAs) until November 1, 2016, to allow more time to discuss the matter with product providers.
TFSAs were introduced in South Africa on March 1, 2015, as an incentive to encourage households to save. They have a maximum annual contribution limit of ZAR30,000 (USD,970) and a lifetime limit of ZAR500,000 per person. TFSA proceeds are exempt from income tax, dividends tax, and capital gains tax.
National Treasury still intends to allow investors to be able to transfer existing savings from one product provider to another during the life of a tax-free savings account. This was initially not permitted during the first year of the incentive (until March 1, 2016) to allow all product providers, such as banks, life insurance companies, and collective investment scheme managers, to prepare.
As various product providers have indicated that their systems are not yet able to offer transfers, the Treasury has agreed to postpone the implementation of transfers to allow more time to consult with product providers on the necessary rules and procedures.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Mar.15, 2016