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