This year marks the maturity of all Section 12J investments, and investors are waiting in anticipation to see whether their return expectations will be met.
Although the investment had an attractive upfront tax benefit, the incentive came with a drawback in that investors are obligated to pay a maximum of 18% capital gains tax on their original investment amount, as well as on any growth. The tax obligation is regardless as to whether the investment returned a profit or not.
To illustrate, if an investor invested R1 000 000, they would have a maximum capital gains tax liability of R180 000 on their original investment and a further 18% on any profits.
Jaltech's Section 12J Exit Income Opportunity
To assist investors with shielding their Section 12J exit tax liability, Jaltech is launching their latest investment – Jaltech's Section 12J Exit Income Opportunity.
The Jaltech Section 12J Exit Income Opportunity offers exiting Section 12J investors an opportunity to invest in a dual mandate which will offer investors a tax shield against the 18% Section 12J exit tax and the opportunity to earn annual income.
Dual Mandate:
By taking up Jaltech's Section 12J Exit Income Opportunity, investor capital will be split across two strategies:
20% of investor capital will be invested into Jaltech's latest Section 12B investment, this investment will result in investors being entitled to a tax deduction of up to 200% which will result in investors reducing their Section 12J exit tax by up to zero, as well as earn an income over the investment term; and
80% of investor capital will be invested into the Jaltech Income Opportunities Fund - This investment provides investors with access to the South African private debt market - an asset class traditionally reserved for large financial institutions.
By combining these investment strategies, investors will obtain diversification across multiple strategies and sectors of the market, reduce their Section 12J exit tax obligation and earn income annually.
Jaltech is hosting a webinar next week to launch this investment. If you would like to attend, then click here to register.