Old Mutual Invest Tax Free Plan

1. What are the main benefits of a TFSA?

You don’t pay any tax on investment income (interest and dividends) earned in the product, or any capital gains. There are no restrictions on the funds you can invest in (other than that funds cannot charge performance fee), and no minimum investment period is required. You are also not limited on the withdrawals you can make from your investment.

2. Is there a limit to how much I can invest in a TFSA?

Treasury increased the annual contribution limit to R33 000 in 2017 and the lifetime limit is still R500 000. You will not be penalised on investment growth above these amounts. However, you will pay a penalty tax of 40% on income and growth earned on the amount you contribute above the limits. OM Invest has a great solution in place in the shape of the OM Invest Flexible plan to pick up the excess amounts and still offer investors cost saving benefits on the total package.
Once a contribution is made, it will always count towards the annual and lifetime limits, even if you withdraw some or all of that amount.

3. Who can invest in a TFSA?

This product is only available to individuals who are liable for South African tax

4. Can I open a TFSA on behalf of my child?

This could be a great way of kickstarting for your child’s future provided they also have a bank account. Remember that the contribution limits will apply and if you reach the lifetime limit, your child will not be able to contribute more later.

5. What options are available to invest in via a TFSA?

You can invest in a range of unit trusts that do not charge performance fees. The fund selection covers a wide range of asset classes and includes offshore funds. Old Mutual Invest also offers a range of low cost tracker funds and offers clients fee reductions for using our internal fund range, as well as additional fee savings for using the full annual contribution limit

6. Can I transfer into a TFSA from another product?

You will have to withdraw an existing Life Wrapped or Linked investment and reinvest into TFSA. Product transfers between existing TFSAs are on the cards in the very near future.

7. Are my contributions flexible?

You can make monthly debit order investments or lump sum investments. TFSAs are completely flexible investments. The minimum initial lump sum on OM Invest is affordable and the minimum amounts for debit order investments start at R350 per month.
There are no penalties if you miss, stop or reduce recurring contributions.

8. R33000 per year is not much

At face value it may sound like a small investment, bear in mind that is a R2750pm premium, which is not small by any means. Our HNW clients can also consider using their annual donation allowance, meaning (for example) that a husband, wife and two children can contribute a total of R132000 per year or R11000pm as a family.

Old Mutual Tax Free Key Features

Consider boosting your future in a tax free way Today. Contact Ginsburg Financial Services.