{"id":3407,"date":"2020-01-06T08:10:25","date_gmt":"2020-01-06T06:10:25","guid":{"rendered":"http:\/\/contattoblogs.timslatter.co.za\/?p=3407"},"modified":"2020-01-06T08:10:25","modified_gmt":"2020-01-06T06:10:25","slug":"the-investors-tax-guide-for-the-2020-year","status":"publish","type":"post","link":"https:\/\/contattolive.co.za\/north\/the-investors-tax-guide-for-the-2020-year\/","title":{"rendered":"The investors&#8217; tax guide for the 2020 year"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">In the last few months of the year the personal income tax season hangs over year-end busy-ness like a shroud. Then, the new year begins right away with business\u2019 financial year end looming. The last thing most of us want to think about in January is <\/span><i><span style=\"font-weight: 400;\">more <\/span><\/i><span style=\"font-weight: 400;\">tax.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">But really, January is the best time to start thinking about tax \u2013 when you are comparatively freshest, to give you the most time and preparation possible to make it less awful. And, if you are an investor, it\u2019s not enough to simply cough up in 2020 \u2013 several things have changed in regulation and with Sars that may affect the way you are taxed.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">After the Finance Minister\u2019s February budget, investors breathed a sigh of relief. No one suspected another VAT change (there would have been an uproar) but dividend tax, capital gains tax and more remained largely unchanged.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">However, the relief was bittersweet when the dust settled \u2013 the bracket creep that had plagued investors has not been acknowledged at all and so tax breaks were not adjusted for inflation as they usually are.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Even though on paper investors were not taxed much, the lack of inflation adjustment meant that, in reality, investors were getting an effective 2 to 3 percent less out of their investments thanks to tax not taking into account inflation.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The other most significant change for investors, which is less well-known, is the infamous 12J changes. Due to a promised upfront tax incentive for investors, those who invest in venture capital companies (the Section 12J investment class), investment into venture capital essentially doubled in one year \u2013 a significant boon for the country!<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">However, as of November, restrictions to the tax benefit were finalised and passed, meaning that the previously generous tax incentive \u2013 hovering at about 45 percent of the total amount invested in Section 12J funds \u2013 has been limited to a maximum of R2.5 million. So, only R2.5 million at the most can be invested into the class. If you were one of the higher income earners investing sums of that size into 12J, this obviously affects you. It also affects SME businesses that would have benefitted from the 12J class, the companies invested into by the venture capital funds, as there is now a limit on how much investors can put in.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">All of this means slower growth for would-be venture capitalists and has already resulted in the asset class looking less attractive to local investors. If you are team 12J, proceed with caution.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Lastly, one for the petrol heads. Many investors took enthusiastic note of President Ramaphosa\u2019s announcement of a new upcoming automotive special economic zone to be brought in soon to attract local and global investors with significant growth and benefits. However, the taxman has already been all over the development, with numerous (and quite punitive) anti-tax-avoidance measures being proposed, withdrawn and revised several times already in the draft <\/span><span style=\"font-weight: 400;\">Taxation Laws Amendment Bill<\/span><span style=\"font-weight: 400;\">. Those who wish to get involved better wait until the dust settles on this one.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Ultimately, tax is a jungle for most of us and it is well worth us having a chat to stay well within the law while still limiting the damage tax can place on your portfolio growth.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the last few months of the year the personal income tax season hangs over year-end busy-ness like a shroud. Then, the new year begins right away with business\u2019 financial year end looming. The last thing most of us want to think about in January is more tax. But really, January is the best time to start thinking about tax \u2013 when you are comparatively freshest, to give you the most time and preparation possible to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3408,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,27],"tags":[],"class_list":["post-3407","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The investors&#039; tax guide for the 2020 year - Contatto North<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/contattolive.co.za\/north\/the-investors-tax-guide-for-the-2020-year\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The investors&#039; tax guide for the 2020 year - Contatto North\" \/>\n<meta property=\"og:description\" content=\"In the last few months of the year the personal income tax season hangs over year-end busy-ness like a shroud. 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