It is Tax Planning season!
Please note: our deadline for RA, TFSA & Section 12B contributions is 24 February 2026.
Remember: It is much more effective to reduce tax obligations before the tax year ends. Establish your optimal contributions now and invest before 24 Feb 2026.
For most investors the focus is:
1. Tax-Free Savings Accounts (TFSA’s)
TFSA’s are one of the most effective tools available for long-term, tax-free investment growth. Starting early is critical, as contributions are limited to R36,000 per year and R500,000 over your lifetime. That may sound small, but over time the compounded growth can be substantial.
This chart, provided by Coronation, shows that investors that start their TFSA in their 20’s have 45 years to retirement and can grow their accounts into a nice nest egg of R5m in today’s terms. That will provide a significant boost to your financial plan and income. It also shows that this vehicle is significantly better than a direct Unit Trust investment.
If you don’t have a TFSA, you should open one without delay. Finova provides the best TFSA account (no fees and direct ETF exposure) free of charge to existing clients.
Open a TFSA
2. Retirement Fund Contributions
Contributions to approved retirement funds are deductible from taxable income when made within the same tax year, providing an immediate tax benefit. In effect, SARS refunds a portion of your contributions, based on your marginal tax rate.
For example, if you are on a marginal tax rate of 40%, you will receive a refund from SARS of 40% of your contribution to an approved retirement fund.
Importantly, these funds then grow in a vehicle that is protected from tax. For most investors the discipline of contributing regularly to these investments is the biggest contributor to a comfortable retirement.
Optimising retirement contributions is simple: deductions are limited to 27.5% of taxable income, capped at R350,000 per tax year. Then obviously it depends on your available funds, ensure it is done by mid-February!
3. Renewable Energy Investment
Section 12B is a SARS-backed incentive designed to encourage investment into renewable energy projects and offers another meaningful opportunity to reduce tax payable.
In short, 100% of the investment into qualifying renewable energy projects is deductible from your taxable income. Specialists manage the full process and a level of gearing is typically incorporated which increases the tax deduction and improves the return on investment.
Finova still has capacity to accept investment for the 2026 Tax Year. Keep in mind that the time frame it 7-years or more and minimum investment is R500 000.
4. Endowments and other Tax Structures
Once the above have been utilised, further tax efficiency and savings can be achieved legally through Endowments, wrappers and other tax structures. These structures create distance between yourself and the tax obligations. They move the tax obligation into a more favourable entity and simplify tax reporting.
Again, it is critical to start early and make progress each tax year.
Conclusion
Over a few years, by consistently reviewing and refining your financial plan you can dramatically reduce your tax obligations. There are some easy wins, but it’s not a “one size fits all” scenario, The correct solution for you depends on your personal financial circumstances.
Finova can assist with your tax planning and if you earn more than R600 000 per year, we guarantee you will save on your taxes.
The contribution deadline is 24 February 2025 but planning and applications need to be done beforehand. Set up a meeting with one of our consultants today using the buttons below.
