You have two months left to access Section 12J tax benefits; choose your investment wisely

If you’ve decided to take advantage of the sunset clause and invest in a Section 12J fund before the end of June, it’s imperative that you choose the best investment possible.

*This content is brought to you by Lucid Ventures

The recent budget speech by Finance Minister Tito Mboweni brought good news and bad news for investors wanting tax-efficient investment opportunities. The bad news was that the sunset clause relating to Section 12J of the Income Tax Act would not be extended. But the good news is that investors still have until 30 June 2021 to invest in a Section 12J fund and reap the significant tax benefits by offsetting the full capital amount of that investment against their tax liability for the 2012/22 financial year.

But remember, tax breaks alone do not ensure a successful investment

While this once-off tax offset makes any Section 12J fund a very appealing prospect, it’s important to remember that an appealing tax benefit doesn’t mean that one should simply overlook the many fundamental considerations of any long-term investment. So, while it’s important to act quickly to benefit from the Section 12J tax deduction, it’s just as important to still do your homework on the fund into which you plan on investing.

If you’ve decided to take advantage of the sunset clause and invest in a Section 12J fund before the end of June, it’s imperative that you choose the best investment possible. And doing that requires you to ask the following three questions:

  1. Is the investment opportunity built on a solid asset underpin?
  2. Is the investment sector or category robust and reliable in the long term?
  3. Is the opportunity offered, and backed, by a reliable and proven management team?

The Lucid Ventures Retirement Living Fund ticks all these boxes… and more

In addition to providing Section 12J tax benefits to anyone who invests before the end of June, the Retirement Living Fund offered by Lucid Ventures is a solid investment in a proven sector and backed by a highly respected management team.

A solid asset underpin…

Importantly, investors in the Retirement Living Fund enjoy the security of knowing that the fund is underpinned by two prime real estate developments. These are already well advanced in terms of planning, and valuable land parcels have already been secured in the sought-after Houghton and Rosebank suburbs in Johannesburg.

… in a robust and growing sector…

Adding to this sense of security is that these developments cater to the rapidly growing affluent retirement living market segment. This is currently massively underserved and is set to grow exponentially in the long term, given the fact that rising numbers of South Africans are living longer healthier lives. In fact, conservative estimates put the number of South Africans over the age of 60 at around nine million people by the year 2040 – which means demand for quality retirement living spaces is on a sustainable upward trajectory.

… managed by an experienced and respected team

Finally, the Venture Capital Retirement Living Fund is built on a proven business model and is managed by a highly experienced professional team, with proven expertise in fund management, property development, retirement living, hospitality, and aged care. Lucid Ventures was founded by Gidon Novick, former CEO of Comair and Discovery Vitality, and founder of airlines, Kulula.com and Lift. He is joined in managing the Retirement Living Fund by Leor Atie, co-founder of Saicom, and Leonard Fine, who brings over 60 years of business and private equity experience. Between them, this vastly experienced investment team already manages a portfolio with assets of over R400m.

They are joined on the Lucid Retirement Living Fund by an equally talented property development and construction management team made up of Andrew Kuming, founder of Kuming & Staples, and highly experienced architect and development expert, Julian Katz.

Rounding off the Retirement Living Fund team are the operations management duo of Corene Breedt and Michael Sieff, co-founders of SilverAgE, who between them bring decades of experience in the design and delivery of game-changing hospitality, aged care, and facilities management.

Enjoy the short-term tax benefits of Section 12J, with the long-term growth of a solid investment

The Lucid Retirement Living Fund leverages the vast collective experience and extensive insights of this multi-disciplinary team to deliver a retirement lifestyle model that not only innovates and disrupts a very traditional industry but creates a highly compelling investment proposition in the process.

Given the pent-up demand and multiyear waiting lists for existing facilities for this type of well-considered, value-adding retirement living, combined with the increasing value of the high-end properties through which these demands will be met, the Lucid Retirement Living Fund is a long-term capital growth opportunity that will deliver prospects way beyond the minimum five-year Section 12J investment term.

For more information on the Lucid Retirement Living Fund, or to invest: click here.

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