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How does the 2012 Budget impact your Portfolio?

28 February 2012

Minister of Finance Pravin Gordhan | 22 February, 2012 - Budget  

“The 2012 Budget has been well received and has silenced most of the sceptics, but what is the impact on the affluent population? The Treasury has managed to slash the budget deficit while also funding a R1,1-trillion budget for the ambitious infrastructure and social programmes outlined by President Jacob Zuma in his state of the nation address this month. Finance Minister Pravin Gordhan believes that "South Africa’s finances are in good health", and the figures he announced on Wednesday should reduce the chances of a downgrade in the country’s sovereign credit rating. Taxpayers will be pleased by the tax breaks of R9,5bn to individuals and R6,4bn to companies, although the rich will be paying more in capital gains tax and withholding tax on dividends.”

Dividends tax  

The secondary tax on companies will be terminated on 31 March 2012 and a withholding tax on dividends will be implemented on 1 April 2012.  This will align South Africa’s tax treatment of dividends with that in most other countries. The dividend tax will be introduced at 15 per cent. 

Capital gains tax

The introduction of capital gains tax in October 2001 was an important step in broadening the tax base. In order to reduce the scope for tax arbitrage and broaden the tax base further, the CGT inclusion rate for individuals and special trusts will be increased with effect from 1 March 2012 from 25 to 33.3 per cent, and for companies and other trusts from 50 to 66.6 per cent.  To mitigate the impact on middle-income earners, the various exclusion thresholds are increased.  

Do you want to invest abroad?

Want to start building a tax-free portfolio?

Take advantage of the relaxed exchange controls, anyone working in South Africa is allowed to invest R5 Million per year abroad (R1 Million without tax clearance and R4 Million with SARS clearance).

Additional Info

  • Article Website (full URL incl http://): www.sterling-alliance.com
  • Company: Sterling Alliance Financial Services
  • Tel Number: +27 74 281 7339
  • Author Bio (100 Words Maximum):

     

Gary Bloxham

Sterling Alliance is an offshore financial consultancy committed to  meeting the needs of high net-worth individuals and those aspiring to become wealthier. We offer expert financial advice to clients and investors, focusing specifically on expatriates working in Africa. Whether you're aiming to educate your children, buy a holiday home, or planning to retire in comfort, we can offer profession solutions.

We have the expertise to provide a service tailored to your personal circumstances and investment requirements. We will construct a portfolio with a high level of diversification which will be unique. This broad diversification in combination with our structured investment process can reduce your investment risk and produce steady long-term capital growth. We thereby ensure optimum returns for the creation of wealth and financial security for you. Management and maintenance of your assets by our financial specialists saves you valuable time while ensuring constant professional supervision of your portfolio. We develop a unique client/consultant partnership with you and regular meetings ensure timeous and appropriate adjustments in response to fluctuating circumstances, both personally and globally. We offer the following services:

 

• OFFSHORE INVESTMENTS
• QROPS & OFFSHORE RETIREMENT PLANNING FOR EXPATS
• INTERNATIONAL REGULAR SAVINGS
• INTERNATIONAL LIFE INSURANCE 
• INTERNATIONAL TRUSTS
• CURRENCY EXCHANGE
• VARIOUS OTHER INTERNATIONAL FINANCIAL PRODUCTS

Website: www.one-objective.com Email This email address is being protected from spambots. You need JavaScript enabled to view it.