Non-retirement savings plan from 2015

1 Mar 2013

While tax-preferred savings and investment accounts were proposed in last year's Budget‚ this year's Budget has proposed that an amended system will be introduced from April 2015.

An important amendment to the original proposal is that interest-free exemptions will be maintained in addition to the new system‚ good news for people such as retirees for whom interest income is important.

According to the Budget Review document‚ the new tax-preferred saving and investment accounts will be introduced after significant consultation with the savings industry‚ but further consultation will still take place.

The existing proposal is that individuals will be able to save R30‚000 a year and have a lifetime limit of R500‚000‚ increased regularly with inflation. This income can come from capital gains‚ savings‚ dividends and so forth.

Good news for those relying on interest is that with effect from 1 March‚ 2013‚ tax-free interest-income thresholds will be increased to R34‚500 (currently R33‚000) for individuals of 65 and over and to R23‚800 (R22‚800) for those younger than 65. However‚ the bad news is that these thresholds will not be adjusted for inflation in future years.