Smart money moves as the new tax year begins

By Zihaad Israfil, CEO of CFI Financial Group South Africa

“February is often a rushed financial month. People make last-minute decisions, scrambling to catch up on commitments and close gaps they've avoided. Tax planning becomes reactive, prioritising hurried contributions and maximised deductions over long-term strategy. This approach values meeting deadlines over building resilience.

“On 1 March, South Africa entered a new tax year. That date matters. It is one of the few predictable reset points on the financial calendar. The start of a tax year provides investors with an opportunity to step back, review their financial structure, and decide how to position their capital for the year ahead.

“The smart move is to treat the weeks after the tax-year reset as a design period for your financial strategy. It’s time to slow down, build structure, and make decisions that can hold under pressure when markets inevitably move.

Financial moves to consider

“In South Africa, individuals can now contribute up to R46,000 per year to a Tax-Free Savings Account (TFSA), within a lifetime limit of R500,000, as set by the South African Revenue Service. Yet many investors either delay these contributions or fail to align them with a broader strategy.

“Similarly, retirement fund contributions are deductible up to 27.5% of the greater of taxable income or remuneration, capped at R350,000 annually. This makes retirement contributions one of the most important long-term capital allocation decisions investors can make, as they influence liquidity, risk exposure, and tax efficiency over time.

“These instruments are powerful, but they are not automatic solutions. Tax efficiency should support your broader investment strategy, not dictate it.

Think beyond tax deductions

“One of the most common pitfalls is allocating capital purely for the sake of tax relief. A well-structured portfolio that accounts for tax intelligently is far more sustainable than one built around deductions alone.

“A new tax year also provides a useful moment to revisit capital gains planning. While capital gains tax is triggered when an asset is sold rather than when it is held, portfolio rebalancing decisions can still have tax consequences.

“This is where thoughtful planning becomes important. Investors should consider how adjustments to a portfolio may affect tax outcomes while ensuring that changes remain aligned with their long-term objectives.

“Liquidity must also be part of the conversation. Locking capital into long-term instruments without understanding near-term obligations can create unnecessary stress. Even when the tax benefit is clear, the impact on cash flow is often underestimated.”

Markets move independently of the tax calendar

“Financial markets do not respond to the South African tax calendar. Geopolitical developments, earnings cycles, commodity prices, and currency movements continue regardless of local tax deadlines.

“That is precisely why the start of a new tax year can be useful. It creates a natural pause, allowing investors to reassess their financial structure before reacting to the next wave of market volatility.

“It is also important to distinguish between long-term investing and trading activity. Tax planning refers to overall financial planning, while trading may represent a separate component of an investor’s broader market participation.

“Understanding how these different approaches fit together helps investors maintain discipline in both areas.”

A deliberate start

“At the beginning of a new tax year, investors should align contributions with long-term objectives, consider liquidity alongside tax efficiency, and ensure their portfolios reflect their risk tolerance rather than simply chasing deductions.

“The tax year does not reward urgency. It rewards planning.

“Using this moment wisely can provide clarity and structural advantage long before markets present their next opportunity.”

How CFI can support investors and traders

• Education that simplifies decision-making: CFI delivers tailored market education content, insights, and practical explainers designed for South African investors, helping them understand market dynamics, risk, and strategy in clear, practical language.
• Risk-free practice through demo trading: CFI’s proprietary demo environment allows users to test strategies and experience South African and global markets in real time without risking capital.
• Webinars and workshops: CFI hosts expert-led sessions focused on relevant market themes, regulatory developments, and risk management, helping investors make more informed decisions over time.
• Support when you need it: CFI provides access to specialists who understand local market conditions and can guide users through CFI platforms, tools, and strategies to help build confidence and consistency.”