MAKE YOUR TAX WORK FOR YOU
SARS Supported Investing – S 12J
Introducing Section 12J a SARS approved Investment Opportunity that allow Tax Payers to divert their Tax Payable into a 100 % Tax deductible Investment.
This section allows an investor to deduct the full cost of their investment into an approved S12J company against their taxable income. This benefit is available to individuals, companies and trusts, and can be utilised against normal income as well as Capital Gains Tax.
Why invest in a Section 12J venture capital company?
- It’s super tax Friendly
- It provides additional non-financial investor benefits
- It improves overall portfolio performance
- It achieves important socio-economic benefits
1. It’s super tax Friendly:
Investors (individuals, trusts and other entities) in a section 12J VCC are entitled to a full deduction of their investment into the VCC from their income for income tax purposes. This investment opportunity is ideal for investors facing a high tax liability and are seeking some form of tax relief.
2. It provides additional non-financial investor benefits:
Corporate investors, working with their verification agencies, can derive additional benefits and credits for their B-BBEE scores (including ownership), enterprise development scores, supplier development scores, training and employment creation. This helps to enhance the outcomes of their allocation towards corporate social investment (CSI) expenditure. In addition, the investment essentially shifts their CSI spend from being an expense to an asset while at the same time receiving tax relief. The CSI investment into a VCC removes the need to devote management time to this important obligation.
3. It improves overall portfolio performance:
Our section 12J VCC investments are aimed at delivering a yield better than bonds and cash, but with a risk as close to cash as possible. The investment is designed as an income product in the form of a dividend stream. Unlike interest income, which is subject to income tax, this dividend stream will attract dividend tax (currently 20%). Adding this investment to a portfolio will consequently improve the net return but at a lower risk.
4. It achieves important socio-economic benefits:
The projects our VCCs invest in directly and indirectly generate jobs and ownership through new businesses related to the projects in which we invest Social stability will be enhanced through the reduction of unemployment and increase in permanent jobs.
Impact Investment Agri-Tech (Pty) Ltd
With a focus on intensive small livestock farming (sheep and goats). Extremely strong BEE benefits are possible. The expected investment returns are between 10% and 12%
Impact Investment Power-Tech (Pty) Ltd
An Independent power producer opportunity within municipal areas where there is piped gas infrastructure. Expected returns are between 12% and 15%
Impact Empowerment Ventures (Pty) Ltd
A Focus on various very well managed, profitable business ventures, both medium and large, existing as well as early stage operations. Great business ownership and B-BBEE benefits especially through Education Tax Incentives to businesses offered by SARS for 2019 to 2028. Expected returns are between 12% to 18% per annum.
Impact Housing Solutions (Pty) Ltd
A focus on waste processing into ultra-low-cost moulded housing units. Strong B-BBEE benefits and environmental benefits are possible. Expected returns are between 18% and 20% For more information on these companies, refer to the relevant private placement memorandum, which is available on request, and to the information sheets that are available here. Read more about the projects in which these companies invest.