Invest 12J


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 dos and don'ts which should assist you with narrowing down your selection:

  • Don’t get caught up in investing in a Section 12J investment simply because there is an attractive tax benefit associated with the investment. Ignore the tax benefit when performing your due diligence and select the 12J investment based on the underlying investments.

  • Do engage with the 12J company and ask as many questions as you deem necessary before making an investment. 

  • Don’t be fooled by the fee structure, make sure the 12J company charges reasonable fees. Avoid performance fees based on net/risk capital, 12J companies should earn their performance fee on any amount above your original investment.

  • Do look for Section 12J investments which have realistic and effective exit strategies.

We have reviewed various VCCs in the market and here are two recommended VCCs based on the fees charged, targeted returns, exit strategy and risk profile:

Infinity Anchor Fund

Infinity Anchor Fund is an approved Section 12J Venture Capital Company and was established to cater for investors seeking a lower risk investment, yielding an attractive and consistent semi-annual dividend return with the added benefit for a potential tax credit on the amount invested.

Investment Highlights

  • Strong investment profile with competitive returns targeted at 20% IRR p.a. (net fees & tax) including a 7% dividend yield paid semi-annually

  • Low fee structure of 2% per annum with no initial or performance fee

  • Large pipeline with the first R50 million to be invested within 3 months

  • Clear and effective exit strategy 

  • Lower risk investment into asset-backed rental SMEs and similar businesses with contractual revenue streams

  • Accessible investment with a R100,000 minimum

For more information on Infinity Anchor Fund you can email or click here to read their investment summary

Zimbali Capital

Zimbali Capital is an approved Section 12J Venture Capital Company and was established to provide investors with returns based on high quality property & hospitality assets around South Africa.

Investment Highlights

  • Shariah-compliant

  • Targeted IRR of 18% p.a. (net fees and taxes)

  • Lower risk investment into property backed hospitality investments

  • Clear and effective exit strategy

  • Low fee structure of 2% p.a. and 20% performance fee, based on any amount above the investor's original investment

  • Minimum investment of R1 million

For more information on Zimbali Capital you can email or click here to read their investment summary

Section 12J Directory

Browse the list of SARS approved Section 12J Companies. An investment into a Venture Capital Fund provided by one of these companies is fully tax deductible

Section 12J FAQ's

Want to know more about Section 12J? Check our Frequently Asked Questions for answers on some of the more common queries relating to Section 12J

All About Section 12J

A list of articles and resources to enable you to make an informed decision on investing within the Section 12J framework and claiming your tax deduction.