March 2013

 

Gordhan will tinker with our taxes sooner or later

 

1. Xhilarator (Pty) Ltd, of which I have been the CEO and  Fund Manager two years ago, only managed fund of funds in and out of South Africa. The mandate was to give clients an absolute rate of return, in other words a positive return above inflation. For many years since 2003 the staff of Kanaan Trust (who also worked for Xhilarator (Pty) Ltd) and I, serviced their clients via the investment products we managed on behalf of Xhilarator (Pty) Ltd.
   
   
2. As many of our clients were already retired or close to retirement where the need for life and disability cover are usually irrelevant, comprehensive financial planning which is usually activated by the need for immediate capital planning (Life and Disability Cover) was not our focus.
   
   
3. Our main focus was to protect our clients’ hard earned savings. However, we became aware of a lot of noise in the financial media recently, according to which government might raise high income earners marginal tax rate to 45%, which is convincing us that the old fashioned financial analyses (for tax planning and estate duty planning) is essential if one wants to protect the clients capital properly (see extract on tax here and here).
   
   
4. By 2003 we had setup family trusts for most of our high net worth clients and assisted them with the process of transferring their assets to their trusts, so as to avoid estate duty and reduce their income tax on investment returns, yearly. We have found recently that many clients have stopped with the process, but we have now decided to assist clients who find it to difficult or time consuming to continue with the process of transferring assets to a family trust and to assist them with the drawing up of the yearly balance sheets for the tax returns.
   
   
5. If you feel that you pay too much income tax on your salary or your investments and your estate might be exposed to estate duty, feel free to contact our offices for assistance.

 

Andre Delport