Tax Season 2019

Today marks the opening of the  tax season for individuals to submit their tax returns.  Branch filing will close on the 31st of October with e-filing closing on the 4th of December 2019. If this time of year is causing stress and anxiety or even if doing your taxes feels like yet another chore, you could simply give us a call. We offer professional tax services. Our Tax Practitioner, Joyce is highly qualified and ready to assist you. A few key advantages to using our tax service are:

  • Ensuring you maximise your tax benefits. ( For example: we helped a client log his travel allowance correctly, resulting in his refund going from approximately R8000 to R19000).
  • As professionals we keep up to date with changing tax laws, which ensures you are always compliant and do not have to look over your shoulder for Uncle Sam!
  • We take the admin and hassle out of tax. We keep a file going throughout the year, so simply forward us your medical expenses or any other relevant documents as they come in! (no more shoe boxes!)
  • No more going in to SARS, if the occasion ever arises, we accompany you which means we go with a pre-booked appointment in the practitioners section! No more queues!
  • Competitive fees. (This service is delivered in line with our investment advice philosophy. So we aim to deliver value for money.)

Our fees are as follows:

Base cost: R1 200 ex VAT (non-provisional taxpayer)

Base cost: R1 500 ex VAT (provisional taxpayer)

Visit the SARS branch: R700 p/hr, with the average time being 1 – 2 hours

Audit fee of R500 ex VAT ( if you are audited more than once, we will bill R500) this audit is something we cannot control. SARS are randomly auditing clients, mostly those who are due a refund and this is regardless of how simple ones tax return might be.)

Updated Tax Rules 

Submission of tax returns calls for proper planning to ensure  accurate and hassle free submissions.  To ensure a smooth process the following and all other relevant documents  to the tax year in question need to be in place:

  • IRP5(s),
  • medical certificates,
  • pension certificates,
  • proof of medical expenses

There have been a few changes that were made by SARS with one being the increase in R500k tax threshold for certain tax payers.  This threshold only applies if the following criteria is met:

  • You have worked for a full 12 months for ONE employer only and received only ONE IRP5;
  • You have no additional allowances or deductions to claim on your tax return i.e. medical aid, retirement funds or donations (else you may miss out on your refund);
  • You have no travel allowance nor do you make use of a company car; (you may miss out on your refund)
  • Most importantly, you earned absolutely NO other income i.e. interest, dividends, rental income etc during the tax year;
  • You did not make any capital gains greater then R40 000 for the tax year.

It is important to remember that this filing threshold, provided you meet ALL these conditions, is not the same as the threshold to actually pay tax or have PAYE deducted. For the 2020 tax year, this remains at R79 000 per year for taxpayers under the age of 65.

Furthermore, should you have ceased SA tax residence during the year of assessment you must submit an ITR12 in order to inform SARS of the change in tax status, as well as report any deemed capital gains due to the exit charge.

Please do not hesitate to contact us, a consolidation is free and you might just walk away with a plan to pay less tax! Which is always a pleasure, isn’t it?

 

 

 

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Offshore Investments: how to guide your decision process

Investing offshore should never be a knee-jerk reaction to events, but rather a decision taken as part of an overall financial plan. Your personal circumstances and risk tolerance should govern how much of your portfolio you should take offshore and into which asset class.~ Tamryn Lamb, head of client servicing, Orbis.

Offshore Investments

Offshore investments are any investments made in countries other than your country of residence. The key to offshore investing is to not only invest in a different country but also in different economies, markets and currencies, thereby diversifying your investment portfolio. It’s a good way to avoid keeping all your eggs in one basket. South Africa has a relatively narrow market and relies on only a few big stocks. It sits as the 17th largest stock market in the world, and for these pertinent reasons, you should be considering bigger opportunities in more developed markets. There are substantial and growing sectors to explore in global markets such as, Healthcare, Energy and Technology.

Factors to consider when investing offshore – or why your financial planner is vital:

Time Horizon

Global investment portfolios differ according to the timespan you are willing to invest. How fast or slow you want your returns will be affected by your personal risk aversion. Looking for quick returns can be a risky business, especially on international markets which can become volatile.

Tracker/Index funds or Actively Managed Funds

The former track the performance of a particular market benchmark—or “index”—as closely as possible. Index funds tend to be more tax-efficient and have lower expense ratios than actively managed funds because they generally trade less frequently. Alternatively, actively managed funds try to outperform their benchmarks and peer group average. However, there is risk involved because these funds can also miss their goals, resulting in losses for the fund—and therefore also, the investors.

Tax and Estate Planning

This will also affect your choice of investment. You will need to ensure that you derive maximum benefit from your assets during your life time, whilst also ensuring that you will be providing for maximum transfer of wealth to the next generation.

Choosing the funds right for you

Firstly it is important to lay out your objectives and consider what type of an investor you are. In this way, you are more likely to achieve the portfolio that’s specific to you. Your financial planner has not only the expertise, but also vital access to global insights and the world’s leading companies and fund managers. You need to work together to create a customised portfolio, choosing the right funds that will meet your individual requirements as closely as possible, taking into account your goals, family and current life stage. https://fosterwealth.co.za/model-portfolios/offshore/

Advantages of investing offshore

  • The South African financial market comprises only one percent of the global market, so you should give yourself the opportunity to invest in companies that have an international footprint, and which may therefore generate substantial profits.
  • By allocating just a portion of your investments offshore, you can spread risk, and enhance the possibility of generating better returns.
  • Offshore investing also gives you access to sectors that you would not find on the JSE.
  • A longer time frame is essential because of the dual volatility of currencies and the markets.
  • In addition, Estate Planning may benefit from investing in an offshore trust, and your financial planner can advise on this.
  • Investing offshore can also be a way of providing for your children’s tertiary education at overseas universities, or your own travel ambitions, or any plans you might have for retiring overseas.
  • Offshore investing offers a hedge for people who fear political or social unrest.
  • Offshore is also a way to protect your investments against the depreciation of the rand.
At the Foster Group, we take into account – whether short term or long term – your risk profile, your personal goals and other factors. Besides having a personal advisor who is backed by a team with extensive and diverse experience and qualifications, we have multiple investment strategies. We do not just offer you a product, we take you through our advice process and find you an investment solution best suited for you.

Adding quality to every stage of your life

The Foster Group, backed by a proud 28-year history, believes in working for only the best results in all areas, from investments through to retirement planning, and including insurance matters. Creating a personal partnership with each client – and mindful of every individual’s plans, dreams and goals – we are there to guide and advise you on each milestone of your financial journey, not only during your working years but well into retirement. For us it’s about more than just generating income and retaining capital in investments, it’s about the quality of your life each step of the way and your peace of mind. That’s why we focus on building sound relationships based on professionalism, experience, and friendship. Find out more about us at: www.fosterwealth.co.za
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The Impact of Culture on Investment Performance

Over the years of researching asset managers in South Africa and globally, there have been many cases of successful asset managers who have seemingly fallen apart, lost assets and faced uncertain futures. This deterioration often happens quickly and without warning. We spend significant time analysing whether there is a common thread running between these firms that face collapse. Is there any specific factor or common denominator that we could focus on which would allow us to identify those asset managers in advance and avoid them?

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Financial Needs Analysis: counting pennies, creating wealth

To build a sound investment plan for the future, the first thing you need to do is consult a financial planner who will conduct an analysis of your current situation with the view to connecting your financial status with needs and goals. From this starting point, a strategy can be set in place comprising steps to a well-considered investment regime that will ultimately build the kind of wealth you dream of and hope for. It’s a thorough investigation of your financial affairs. A financial needs analysis is therefore essential to preparing for, and accessing, future financial needs.

There is no one plan that suits everyone, which is precisely why the individual analysis must be done. It’s a process that will be affected by five major factors: current wealth; income; health; dependents; and goals.

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A Partnership for Life: transparency and your financial advisor

“There’s no single professional that’s right for all clients.” ~ Gerri Walsh, vice-president for investor education, Financial Industry Regulatory Authority (Finra).

Service is generally about politeness, competency and going the extra mile to help a customer. But the service provided by your financial advisor is a different story altogether – because here you are looking at the very epitome of trust, the basis of a partnership for life.

And therefore it should be a relationship that is open, honest, forthright and enduring. In fact, a friendship. And the key to this, is transparency.

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