Transfers of Tax Free Savings Accounts from 1 March 2018

From 1 March 2018, Section 12T(8) of the Income Tax Act will allow for transfers of Tax Free Savings Accounts (TFSAs) between product providers, in part or full, without incurring a reduction of your annual (ZAR33,000) and lifetime (ZAR500,000) limits.

Previously, if you wanted to transfer your TFSA from one provider to another, it would have been regarded as a new contribution.

5 benefits of the new rules include:

  1. Greater choice and flexibility for investors;
  2. Enables investors to better organise their finances by consolidating their TFSAs under one roof, if appropriate;
  3. Enables transfers from TFSAs provided by Banks and Life Assurance companies to Unit Trust Asset Managers (our preference);
  4. Allows individuals to gain greater investment / risk exposure to assets with greater potential for above-inflation growth, if appropriate; and
  5. Promotes healthy competition between product providers, which should result in better investor outcomes.

Please contact us if you wish to learn more about your options for saving tax and fees on your investments.

Posted in Blog, Financial Planning, Investments, Tax, Tips.