An investment for Pleasure and Profit. 12J tax benefits – The Facts

*This content is brought to you by Pearl Valley Hotel by Mantis and Futureneers Capital

THE ASSET

The Pearl Valley Hotel by Mantis at Val de Vie Estate, offers guests unparalleled excellence and unrivalled service within stylish surroundings where one can immerse yourself in the countless pleasures that this destination has to offer. Mantis offers investors the opportunity to co-own this luxury hotel without the worries and hassles of management, marketing and maintenance. You simply invest and enjoy the benefit of this INVESTMENT FOR PLEASURE & PROFIT.

Phase 1 – SOLD OUT

Phase 2 – 40 one-bedroom suites

In total, the hotel consists of 63 one-bedroom suites, 1 wheelchair friendly one-bedroom suite, and 7 two-bedrooms suites, an upgraded communal area with swimming pool and deli.

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THE INVESTMENT only available until 30 June 2021

Fractional ownership of a Mantis luxury hotel

Minimum investment amount R1m

Maximum investment amount R2.5m for individuals and trusts and R5m for companies per annum

* All prices include VAT and fees

100% TAX deductible | ANNUAL DIVIDENDS | CAPITAL GROWTH

LIFESTYLE BENEFITS

Fractional Section 12J Ownership

  • Receive a 100% tax deduction on the total investment amount which means up to 45% of your investment paid for by SARS
  • 6% guaranteed gross yield derived from hotel operations for first 24 months
  • Receive annual dividends from Hotel Rental Pool operated by Mantis
  • Receive above average capital growth on the property asset
  • Receive a variety of lifestyle benefits for your enjoyment

Pearl Valley Hotel by Mantis

Capital Growth
Pearl Valley Hotel by Mantis Phase 1 has yielded equity of around R1m per hotel unit over a four-year period, therefore achieving 19% per annum capital growth.

Targeted Returns

The targeted Internal Rate of Return ranges from 20% to >35% per annum depending on the funding mechanism chosen.

Funding Options

This is undoubtedly the only 12J Investment fund offering investors the option to choose any one of four funding mechanisms available and is a further notable differentiator of the Pearl Valley Hotel by Mantis offering by Futureneers Capital – the Section 12J VCC and fund managers.

These options are available to Provisional and PAYE tax-payers’ and include:

1. Cash

  • 100% cash up-front
  • 45% tax break / tax refund effectively discounting your leisure property investment by up to 45%.
  • 20% Pre-Tax targeted IRR

2. Smart Bridge Loan

  • Minimum 55% cash up-front
  • 45% bridge loan over the period until SARS rebate is received, at which time the loan is settled in full
  • 21% Pre-Tax targeted IRR

3. Smart Instalment Loan

  • Minimum 5% cash up-front
  • Up to 95% funded over the 5 year period, at which time the loan is settled in full whilst paying the same monthly instalment as per a 20 year bond.
  • 35% Pre-Tax targeted IRR

4. Global Hedged One

  • 100% cash offshore via Investec or use capital already invested offshore
  • Invest in a Sanlam Private Wealth USD instrument, which serves as security for a local ZAR loan to fund your 12J investment
  • >35% Pre-Tax targeted IRR

*all returns are based on assuming the following

– Minimum investment amount of R1m

– Maximum Section 12J tax benefit of 45%

– Capital Growth of 5%

– Usage rights equating to 3%

– Call interest rate of 3.85%

– Annual 12J fees, property taxes and company tax -1.8%

– Capital Gains Tax of 18%

– Corporation Tax at 28%

LIFESTYLE BENEFITS FOR INVESTORS

Investors receive a variety of world-class lifestyle benefits including:

  • 6 to 25 room nights per annum dependant on amount invested and funding option selected
  • Advanced bookings allowed and not subject to peak time booking restrictions
  • Gift allowance for unused room nights per year
  • 50% discount off published rates over and above the free room nights allowance
  • Switch and swop out with other properties within the Mantis Investment portfolio
  • Optional discounted golf membership while in residence
  • Access to all recreational facilities and clubhouse during your stay
  • 20% discount on published rates for all Mantis managed hotels in Sub-Saharan Africa

Risk factors

The Pearl Valley Hotel by Mantis investment balances Risk vs Return, as a tangible property asset underpins this Section 12J investment.

Three risk assessment considerations:

  1. SARS Hedge
  • SARS assumes the 45% risk, leaving the investor exposure to only 55% of the total asset value
  1. Property Hedge
  • This 12J investment is underpinned by the “intrinsic” current and future value of the property
  1. Exceptional Risk-Return Ratio
  • The Pearl Valley Hotel by Mantis 12J investment lies on the scale at 20.3% between a low / risk free call rate of 3.5% and a traditional high risk venture capital target of 30 to 40%, providing targeted returns substantially higher than traditional returns associated with lower risk property-backed investments

Exit Strategy

In order to maintain your tax deductible benefit, it is mandatory to remain invested for a minimum period of 5 years

There are 3 Exit Options:

  1. No Exit
  • Maintain your investment in a successful asset operated by Mantis
  • Continue to benefit from hotel profits, capital appreciation and lifestyle benefits
  • No tax implications
  1. Cash Out
  • The asset is sold and cash is distributed to investors
  • Fully taxable at a base cost of zero
  • Company pays tax on profits and investor dividend tax
  1. Asset Out
  • The asset is distributed as a dividend in specie
  • Fully taxable at a base cost of zero
  • Capital Gains Tax is payable at a base cost of zero, however, the impact is minimised through time value of money

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