Tax-Free Savings Plan

Tax-Free Savings Plan What is the Grindrod Asset Management Tax-Free Savings Plan? • A convenient long-term savings and investment product. • In ...
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Tax-Free Savings Plan

What is the Grindrod Asset Management Tax-Free Savings Plan? • A convenient long-term savings and investment product. •

In line with the South African government’s initiative to incentivise and promote savings in South Africa, through the National Savings Scheme, Grindrod Asset Management is offering a tax-free savings plan. This will be made available to existing and new clients.

• This plan is a tax-free investment by virtue of S12T of the Income Tax Act. • This tax-free savings plan will be available via accounts held in the Grindrod Collective Investments unit trust management company.

Quick Facts •

No tax on dividends Dividend Withholding Tax (DWT) is a tax charge of 15% on dividends received by shareholders. However your Tax-Free Savings Plan is exempt from DWT, allowing you to earn the full dividend which may be automatically reinvested or paid out to you.

• No performance fees All investments included in the account will have no performance fees.

• No tax on interest income All interest and other income, including listed property income, will be tax-free. • No Capital Gains Tax (CGT) You will not be taxed on capital gains resulting from any withdrawal on your investment.


No initial fees Grindrod Asset Management does not charge any initial fees. However, financial advisors will be able to charge an initial advisor fee as agreed with the client.

No additional fees No additional fees will be charged except the annual service fee of the fund you have selected. This may include a trail fee to the advisor.

The tax benefits

No withholding tax on interest

No withholding tax on dividends

No tax on interest and income earned from property funds

No Capital Gains Tax

Disallowed transactions • Transfers from the account to another person or another Financial Services Provider.

• Existing unit trust accounts may not be converted into tax-free saving plans as the aim is to encourage new savings.

Minimum and Maximum

Investment Contributions •

The product allows a maximum annual contribution of R30 000 and a maximum lifetime contribution of R500 000. These numbers may be adjusted for inflation in the future.

The limit of R30 000 per annum applies to ALL your tax-free savings accounts in total, with Grindrod Asset Management and other providers. If investors exceed this limit, this will be considered a contravention of the law, which SARS will be monitoring on an annual basis.

• A minimum lump sum of R5 000 and a maximum annual lump sum of R30 000. • A minimum debit order of R500 per month and a maximum debit order of R2 500 per month. •

• Switches between different funds within the account will not be subject to the annual contribution limits.

• Any amounts exceeding the R30 000 per annum limit will see the capital amount penalised at a rate of 40%. •

Amounts within the account(s) may be withdrawn at any time. However, if these amounts are returned to the account(s) they will be subject to the annual contribution limits.

Over time the balance in these accounts may exceed the R500 000 due to accumulated earnings and capital gains. In such instances, the excess amount and the income earned thereon, will not be subject to tax.


Regulatory requirements • All natural persons who are South African taxpayers may invest in this plan. • Grindrod Asset Management is prohibited from accepting contributions in excess of the contribution limits set by the South African government from time to time. • Transfers between different tax-free savings plans will not be allowed until 1 March 2016. • Where the investor is a minor, any withdrawals may only be paid into the minor’s bank account and not the guardian’s bank account. • No performance fees will be allowed on any of the underlying funds.

For illustrative purposes, taxed versus untaxed annual returns on an investment over a 20 year period 5 Years

10 Years

15 Years

20 Years

Normal taxed unit trust option

R171 310

R392 589

R678 414

R938 340

Tax-free Savings Plan option

R184 917

R460 414

R870 863

R1 367 438

Tax benefit of Tax-Free Savings Plan

R13 607

R67 825

R192 449

R429 098

Taxed funds generate less returns as the taxed portion leaves the account.

Assumptions • R2 500 per month invested over 200 months • Income return rate 7% p.a • Capital return rate 1% p.a • Marginal tax rate of 41%


Funds available Below is a list of Grindrod Asset Management’s unit trust range that will be available as investment options in the Tax-Free Savings Plan.

Payers and Growers® Grindrod Equity Income Growth Fund A Grindrod High Income Fund A Grindrod Managed Growth Fund A Grindrod Stable Growth Fund A Grindrod Global Managed Growth Feeder Fund A Grindrod Global Equity Income Growth Feeder Fund A

Annual Service Fee 1.00% 0.90% 1.00% 1.00% 0.50% 0.50%

Multi-Asset Class and Specialist

(Excl VAT)

Annual Service Fee

Grindrod Balanced Fund A Grindrod Diversified Preference Share Fund

1.25% 0.75%

Listed Property

Annual Service Fee

Grindrod Global Property Income Feeder Fund A


Contact details Toll free telephone 0800 117 842 or email [email protected]


Collective investment schemes are generally medium to long-term investments. The value of participatory interests or the investment may go down as well as up. Past performance is not necessarily a guide to future performance. Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from the manager. There are no performance fees charged in the portfolio. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. A fund of funds is a portfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure for the fund of funds. Grindrod is required by law not to accept contributions in excess of the annual and lifetime limits. Grindrod does not monitor the contributions you may have with other service providers. Consequently, you undertake to advise Grindrod when your aggregate contribution across service providers has reached the annual limit and the lifetime limits. Grindrod is not responsible for the tax penalty which you may incur as a result of excess contributions made by you into the Investment Plan. No transfers to another tax free investment service provider will be allowed before 1 March 2016. If this tax free investment is in the name of an investor who is a minor, withdrawals made will only be paid to an account in the name of such minor or that minor’s deceased estate account. Grindrod does not charge any fees for withdrawal of the tax free investment. The General Investor Report is published on a quarterly basis and is available on request and on our website. The portfolio may borrow up to 10% of its net assets on a temporary basis. Such borrowings are permitted only to meet the portfolio’s obligations in relation to (i) the administration of the Fund relating to purchase or sale transactions; and/or (ii) the redemption or cancellation of participatory interests in the portfolio. Borrowings in relation to (i) above are only permitted for a period of up to 8 calendar days, and 61 calendar days in respect of (ii). Past portfolio performance is measured on a rolling monthly basis. The annual report, brochures, application form is available on our website. The portfolio may be closed to new investments at any time in order to be managed in accordance with its mandate. Forward pricing is used. The investment management of the portfolio is outsourced to Grindrod Asset Management (Pty) Ltd, an authorised financial services provider, FSP 29834. Information on this document shall not be construed as financial advice as defined and/or contemplated in terms of the Financial Advisory and Intermediary Services Act, Act 37 of 2002 (“the FAIS Act”). Grindrod shall, wherever possible, avoid situations causing a conflict of interest. Where it is not possible to avoid such conflict, Grindrod shall advise you of such conflict in writing at the earliest reasonable opportunity and shall mitigate the conflict of interest in accordance with its conflict of interest Management Policy. You may send a blank email with a subject “conflict of interest” to the compliance officer, should you need a copy of this policy. Complaints should be directed to the Compliance Officer. The Complaints Resolution Policy is available on request. The Compliance Officer’s email address is [email protected]. Grindrod Collective Investments (RF) (Pty) Ltd and Grindrod Asset Management (Pty) Ltd (collectively referred to as “Grindrod”) are members of the Grindrod Financial Services Group and are supervised by the Financial Services Board.