Mantis Section 12J Investment – Q&A – Last chance to invest and have SARS pay up to 45% of your investment for you

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

Q: What is the minimum investment and deposit required?

A: Option 1: R1,000,000 Cash

Option 2: R50k Cash deposit on a R950,000 Smart Loan (assuming your marginal tax rate is 45%)

Option 3: R550,000 Cash deposit on a R450,000 Bridge Loan (assuming your marginal tax rate is 45%)

Q: Can I make use of a bank loan facility for this investment?

A: It is possible to make use of a personal bank loan or access bond, after considering the respective interest rates and repayment plan.  The Bridge Loan and Smart Loan on offer allows you the flexibility of making lump sum payments and settling the loan at any time without incurring penalties and does not require you to provide any personal surety for the loan.

Q: If I invest in the Pearl Valley Hotel by Mantis, would I only be able to make use of the lifestyle benefits at the Pearl Valley Hotel?

A: No, once you invest in any one of the Mantis assets on offer, you are then afforded the ability to swop out your usage days between all the assets in the Mantis Investment portfolio.

Q: Does a R1.5m investment translate to 15 days usage per year?

A: This is correct – cash investors receive 10 days for every R1m invested.

Q: If I make a cash investment of R2.5m in my personal name for example, but my taxable income only allows for a R1.5m deduction in the current tax year, can I carry over the assessed tax loss to the next tax year.

A: Yes you can, even if you are a salaried employee provided you stay employed for the full 5 year investment period (not necessarily with the same employer).

Q: Is it possible to qualify for a 12J investment in different entities (personal capacity, trust and/or company) even if you are a connecting party?

A: Yes, an investor may be a connected party and invest up to R2.5m in your personal capacity, up to R2.5m in a Trust and up to R5m in your company all together, while holding an interest in said company or trust.  This could therefore enable an investor to invest up to R10m or more in the 12J cap in the current tax year.

Q: Is it possible for an investor to choose between the different funding options for each entity?

A: Absolutely, the beauty of these funding mechanisms is that we are able to tailor them to suite each investors individual circumstances.  An investor is able to determine the deposit amount (minimum 5%), monthly instalments payable and time frame within which to settle the loan (maximum of 5-year period).

Q: What penalties would an investor incur if a loan is settled at an earlier stage than planned?

A: Zero penalties are incurred if a loan is settled in full at any stage of this investment prior to 5-year repayment period. Lump sum payments at any time during the loan period are also allowed.

Q: Does the Global Hedged One Offshore option only allow for an investor to invest R1m cash in order to qualify for the 12J investment in South Africa?

A: Investors can make use of funds already offshore to qualify or they may take advantage of the favourable exchange rate and make use of the offshore option provided by Sanlam Private Wealth to qualify for the Section 12J investment in South Africa.

Q: Is it possible to own the asset with a title deed at the end of the 5-year investment period?

A: This is only possible if an investor invests equal or more than the value of a complete hotel room.

Q: Would I be able to receive a guaranteed buy back at the end of the 5-year period?

A: We do not offer a guaranteed buy back. At historical 19% p.a. capital appreciation of these hotel rooms which far outperforms what the guaranteed buy-back would present.

Q: How do I exit the investment?

A: During year 5 of the investment you can elect to exit at which time the fund managers will sell some of the hotel rooms into the open market to create liquidity in the fund in order to exit investors. Sales of hotel rooms at the time will attract capital appreciation which will, proportionately to your investment value, be for the benefit of the investor.

Q: Could there be a delay in exiting this investment? In other words, do you need a buyer willing to pay the price? So, if my assumption is right, it means the selling price will depend on what the buyer is prepared to pay.

A: You are ultimately investing into a property asset – on sale of the assets the “willing buyer willing seller” principal will apply however the fund has close on a year to liquidate assets in order to exit investors.

Q: Can I transfer my provident fund directly into a 12J investment?

A: Unfortunately, not.

Q: Do you have an equivalent investment outside South Africa?

A: Mantis is currently working on a number of Investment opportunities in order to grow the portfolio and interested parties pay subscribe to our newsletter in order to receive information of new developments as they are launched.

Q: What are the fund management fees associated with this Section 12J investment?

A: Assuming the investor is in the 45% top tier tax bracket the net 12J fees are 1.3% p.a. due to the fact that the fees are included in the 12J subscription (investment) amount, and the investor therefore receives a tax deduction on the fees.

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