There is no quick way to reduce your tax burden. In short tax planning involves a number of smaller things which we should all do as individuals.
- Invest in a personal tax free savings account. Yes you may earn more after tax from paying off debt but you need a balance of cash savings available and the long term opportunity of maximising the tax free capital amount. Each year you need to make a contribution as the annual contribution is limited at this point to R33 000 with an accumulated lifetime limit of R500 000. Do this for yourself and your immediate family and grand children
- Limit your Capital Gains tax by trying to use your annual Capital gains exemption, this is currently R40 000. Also bear in mind that you get an allowance from the slae of your primary residential property of up to R2 million. If you hold your home for 40 years you still only get R2 million. Thus upgrading every 10 years may be worth it to reclaim an additional R2 million.
