Monday, 26 November 2018: Section 12J season opens once more allowing South Africans to write off 100% of the investment against their taxable income. There are more than 100 registered Section [...]
Many so-called community shareholders share dissident shareholders’ concerns about gaming vs fast-food investments. The board of embattled empowerment group Grand Parade Investments (GPI) must [...]
There are more than 100 registered Section 12J companies in South Africa and is estimated that the market has raised more than R3.6 billion in investments. S12J was instituted in 2009 with a 12 [...]
Yes, you may utilise a loan / gearing to make an investment into a VCC, subject to complying with Section 12J(3)(a) of the Income Tax Act
As at Feb 2018, there has been c. R3.6 billion raised into the Section 12J industry. Westbrooke is SA?s largest Section 12J fund manager, managing c.50% of the capital raised in the industry to date.
The VCC regime, introduced in 2009, is subject to a 12-year sunset period that ends on 30 June 2021. The upfront income tax relief will only apply to VCC shares acquired on or before 30 June 2021.The sunset clause is to be reviewed, and may be extended.
The term of the investment will be 5 years, with a realization period of 18 months (if required).
As with any private equity investment, an investment in a Section 12J company carries risk. It?s important, therefore, to assess the investment strategy of the Section 12J company to ensure you understand the associated investment risk as well as the expertise and track record of the asset manager.
There is no annual limit for subscription into a Section 12J company.
Only if you sell your shares within 5 years of their being issued, will you incur a recoupment and have the tax relief withdrawn.
Westbrooke will provide each investor with a tax certificate which may be requested as evidence of their investment into a Section 12J company.
Investors can claim the tax relief by either reducing their estimate of taxable income when submitting provisional tax returns or by obtaining a tax refund through the annual income tax assessment.
An investment into an approved Section 12J company is 100% tax deductible in the tax year you invest.
A Venture Capital Company as described in Section 12J of the Income Tax Act, which came into operation with effect from 1 July 2009. Section 12J is a tax-based incentive designed to encourage individual and corporate investors to invest in a range of small and medium size companies by investing through Section 12J.
The aim of the incentive is to create a pooling mechanism of passive investors who get an upfront tax deduction for stimulating the South African economy.
