Tax-Free Investment

Make your savings work harder by investing tax free. With the Coronation Tax-Free Investment , you don’t pay tax on your investment returns – both while you’re invested and when your investment pays out. The taxes you save remain invested to grow, which can make an enormous difference over the long term.

Tax free means:

  • No tax on interest or other income
  • No dividend tax
  • No capital gains tax

At Coronation, you will also not pay any initial fees or annual administration fees. The only fees payable are the annual management fees applicable to the underlying fund/s you choose to invest in.

TAX-FREE INVESTMENT ADVANTAGES TAX-FREE INVESTMENT  LIMITATIONS
  • Grows your savings without any taxation.
  • Unrestricted access to your money. (However, a long-term horizon is recommended to fully realise the benefit of compounding your tax-free return.)
  • No initial fees, exit penalties or administration fees.
  • Choose from a range of funds to suit your investment needs. Your fund choice does not have to comply with Regulation 28.
  • You can open a tax-free investment for minor children.
  • Only South African resident individual investors (not trusts, companies etc.) are eligible.
  • A regular income cannot be paid out; interest and dividends earned are automatically re-invested.
  • No protection against creditor claims.
  • A maximum of R33 000 per annum or R500 000 over your lifetime can be contributed.

INVESTMENT OPTIONS

You can choose to invest in a range of Coronation funds, tax free. You can also withdraw money and switch between funds without any costs or penalties.

Choose one or more of the following funds:

Minimum Investment Amount LUMP SUM R5 000 (The minimum lump sum for the Coronation Money Market Fund is
R10 000)
RECURRING R500 per month (The maximum is
R2 750 per month)

TAX-FREE ALLOWANCE

You can invest up to R33 000 tax free every tax year (March 1st  to end-February of the next year) and up to R500 000 over your lifetime. These limits are legally set and apply across all tax-free products you invest in (not per product). If you exceed them, you will pay a penalty tax of 40% on the additional amount invested.

In addition, all amounts you invest will count towards your annual and lifetime limits regardless of any withdrawals you make - you cannot 'replace' the money you withdraw with a new investment. For example, if you invest R33 000 this tax year and then withdrew some or all of your savings, any further investment during the tax year will be taxed at 40%.

SAVING FOR YOUR CHILDREN

Children can also receive the benefits of tax-free investing. By opening a tax-free investment on behalf of your child, you unlock the full power of compounding on their long-term savings.

The principle of compounding is simple - the returns earned on an investment also start earning returns. What this means is that the tax-free dividends and interest earned in the Coronation Tax-Free Investment are immediately put to work by being automatically re-invested. This results in your child’s investment growing at an ever-increasing rate, year after year. Over the long term, this can make an enormous difference.

Each child has a personal tax-free allowance of their own. Please note that a bank account in your child’s name will be required for all withdrawal payments from his or her Coronation Tax-Free Investment. Your savings on behalf of your children may be subject to donations tax, should it exceed the annual allowance.