While your mind may already be on the mince pies, or sandy beach holidays ahead, the financial year end is fast approaching and now is the time to take advantage of the 2025 / 2026 tax exemptions. These transactions need to be made before the 27^th of February 2026.

This is according to senior wealth manager at Private Client Holdings, Mark MacSymon CFP®, who says that leaving top-ups to January tends to only increase the January administration hangover. “Getting on top of these efficient tax planning and investment considerations before closing the laptop in December always alleviates pressure in January,” says MacSymon.

These include, but are not limited to:

1.  Annual donations tax exemption

“The annual donations tax exemption for individuals is currently R100 000 per annum.  Any natural person can make the donation, so if you and your spouse make a donation the annual amount would be increased to R200 000,” says MacSymon. He adds that if you want to reduce your loan account to a trust using your annual donations tax exemption, it’s a good idea to let your accountant know so they can complete the necessary paperwork.

2.  Retirement Annuity (RA) contributions

Retirement annuity contributions made before the tax year end may be tax-deductible within the legislative limit, says MacSymon. He explains that contributions to all retirement funds (Pension, Provident and Retirement Annuities) are deductible up to 27.5% of the greater of remuneration or taxable income, capped at an annual limit of R350 000. Retirement Annuities (RA’s) are only accessible at retirement (under normal circumstances), and you must buy an annuity with at least a part (minimum of two-thirds) of the accumulated value. “Contribution amounts must reflect in the product bank account on or before 26^th of February 2025 for processing on the following day,” says MacSymon.  

3.  Tax-Free Saving Account (TFSA) contributions

TFSA’s provide South African investors with a flexible way to save towards a specific goal or to supplement their retirement savings. As TFSA’s are not subject to income or capital gains tax, MacSymon says that they can be a useful instrument to grow savings over the long term. “The current annual contribution limit is R36 000 (if paid by debit order the maximum monthly amount is R3 000) and the lifetime contribution limit is R500 000. You can withdraw from a TFSA at any time, and there is no tax on withdrawals,” says MacSymon. He adds that while an RA will not form part of your estate, a TFSA will.

“It is generally considered good practice to use a TFSA to supplement your retirement savings, even if you have not reached your maximum allowable contribution to an RA,” says MacSymon.