Tax Free Savings Accounts: 2017/2018

[Creag]

You will recall that the Budget Speech stated that the annual allowance in respect of Tax Free Savings Accounts (TFSA) will be increased to R 33,000 (up from R 30,000). The 2014 Budget stated that the allowance could be increased in line with inflation. (see p 57)

The SAnews website this morning published the below article from National Treasury regarding amendments to provisions of the TFSA. I hope that it doesn't become too restrictive. The current set up suits me just fine (as well as I have just started to get the hang of what I can and cannot do with this investment vehicle).

 

[Creag]

Pretoria - National Treasury will shortly publish final amendments to tax free savings accounts for the year beginning 1 March 2017.

“The amendments spell out a process for transfers, clarify the policy position on performance fees in underlying funds, give guidance on the adequate and consistent disclosure of returns to fixed deposit tax free savings accounts, include various provisions to enable the regulator to adequately oversee product offerings, align the rules of access for fixed deposits and include Postbank as a product provider,” said National Treasury on Tuesday.

Treasury said the ability of investors to transfer will be postponed to 1 March 2018 to allow product providers enough time to prepare for more onerous responsibilities in assisting investors to comply with the annual and lifetime limits.

National Treasury said the transfer of tax free savings accounts can only be implemented between product providers as per investor instructions.

“Individuals will not be able to transfer by withdrawing amounts from their tax free savings accounts and contributing that amount to a different product provider – this would be classified as a new contribution.”

When coming to compliance, product providers will be required to notify the Financial Services Board (FSB) within a calendar month before a new tax free savings account product is advertised in the market.

This is so as to provide the FSB an opportunity to review the features of the offering and suggest changes to the rules if necessary.

“If no response is received, product providers may proceed to advertise the investment as planned. The Regulations require that any change undertaken subsequently to the launching of the product should also be submitted to the FSB in the same manner.” – SAnews.gov.za

Source: http://www.sanews.gov.za/south-africa/treasury-publish-amendments-tax-free-savings-accounts

 

[justplain]

but the R33000 limit applies from now correct?

 

[Muttley]

Stupid limit- should be much higher to encourage savings!

 

[Thor]

Stupid limit- should be much higher to encourage savings!

Still a massive progress that has been made imo.

The TFSA offering as a whole.

 

[Creag]

Stupid limit- should be much higher to encourage savings!

You can have a TFSA for each member of your family.

 

[JStrike]

Stupid limit- should be much higher to encourage savings!

It encourages savings quite well.
Making the yearly amount higher would just provide a nice easy way for some us to avoid paying tax. Which is not really the point and is unfair to the vast majority of people