12 Days to Day Zero – Section 12B investment

*This content is brought to you by Jaltech

The 125% Section 12B tax deduction is in its final year, and time is running out for taxpayers (individuals, companies, and trusts) to take advantage of the enhanced tax benefit. As well as the enhanced deduction soon disappearing, the deployment risk associated with a Section 12B investment should prompt investors to participate sooner rather than later. 

This is because investors can only claim a 125% tax deduction if the solar projects are constructed and start to generate electricity during this financial year. 

Alec Hogg will host a webinar this week with Jonty Sacks, a Partner at Jaltech. Jonty will give attendees in-depth technical insight into Jaltech’s investment (to register, click here).

Despite the tight timelines, Jaltech has an exceptional track record of identifying and deploying investor capital into solar projects within each financial year. Below are a few reasons why taxpayers should consider investing their tax money with Jaltech:   

  1. Proven Track Record:

Jaltech’s previous three Section 12B investments saw more than R350 million invested into over 150 solar assets across 8 sectors in South Africa. 

This portfolio will likely see investors generate a double-digit internal rate of return over the investment term. 

  1. Pipeline:

Jaltech boasts having the fastest-growing solar investment pipeline in the market. This year alone, Jaltech has quoted on over 200 solar projects with a cumulative value of over R2.5 billion

Additionally, more than R200 million worth of projects will reach a final close within the next 1 to 2 months.

  1. 187% Tax Deduction

By introducing conservative gearing into the investment, the 125% tax deduction increases to 187%, which means the investment can return up to 90% of the initial investment amount within the first year.  Register for this week’s webinar with Alec Hogg for more information on calculating the 90% figure – click here to register.

  1. Fees

Jaltech’s fees are transparent, and performance fees do not consider the tax benefit. 

This point should not be overlooked. The term “risk capital performance fees” was coined during the Section 12J era, during which a handful of fund managers charged their investors a performance fee based on tax savings. This has ultimately resulted in low to negative returns on investors’ capital, sparking outrage from many investors and financial advisors. 

Jaltech’s Section 12B IV investment is closing on 31 May and has a remaining capacity of approximately R45 million for new investors. Closing the investment early in the financial year will reduce investors’ deployment risk, placing Jaltech in a strong position to deploy capital before the end of February 2025.

Investors interested in learning more about Jaltech’s Section 12B investment can click here to complete the online form, and a representative from Jaltech will contact them. Alternatively, they can register for this week’s webinar with Alec Hogg and Jonty Sacks by clicking here.

Chris McCormick – Jaltech Fund Managers

Read also: