Section 12 J Investments Are Fully Tax Deductible!
This website aims to equip potential Section 12J investors with all the information they need to make an informed investment decision and benefit from Section 12J of the Income Tax Act.
For investors with a higher risk appetite, or who have maxed out their Retirement Annuity, Pension Fund and Tax Free Savings Account contributions, a Section 12J Investment into a SARS approved Venture Capital Company (VCC) is the perfect way to allocate capital in a tax free way in order to maximise your tax deductions.
Any investment into a Section 12J Venture Capital Fund is fully tax deductible. This means that if you are in the top tax bracket, SARS is willing to give you up to 45% of your investment back!
Just remember that if you are an individual you need to invest before 28 Feb to enjoy the tax benefit. For investors who find themselves having to quickly identify a Section 12J investment/s, here are a few key considerations:
- How has the investment performed in the past. Most Section 12J investments don’t openly report on their returns.
- Make sure that the performance fees are charged only on the growth of the investment (Gross performance fees) and don’t include the tax benefit (net performance fees). Click here for more info
- Make sure you understand whether the fund manager has invested previous investor’s capital. Investing in cash heavy funds can lead to lower returns. Click here to understand the impact of non-deployment.