The Budget has introduced several changes to investment related values and thresholds which will affect how contributions, allowances and certain tax outcomes are calculated going forward.
Below we summarise the key changes that affect investors.
1. Single discretionary allowance (offshore transfers)
The annual limit for individuals to take funds offshore (for investments, travel, gifts, remittances or donations) without specific tax clearance has been increased from R1 million to R2 million per calendar year.
2. Allowable retirement fund contributions
The maximum tax-deductible retirement fund contribution has been increased from R350,000 to R430,000 per tax year, while the 27.5% of your taxable income or remuneration remains unchanged.
If you contribute monthly to your retirement fund(s), this equals R35,833 per month. You can only claim the full amount if your taxable income or remuneration is approximately R1,563,636 or more per year. Otherwise, your deduction is limited to 27.5% of your taxable income or remuneration.
3. Contributions to tax free investments
The annual contribution limit to tax free investments has been increased from R36,000 to R46,000 per tax year, while the lifetime contribution limit remains R500,000.
If you contribute monthly to your tax-free investment, you can now contribute up to R3,833 per month.
4. Capital gains tax exclusions
The annual capital gains tax exclusion has been increased from R40,000 to R50,000 per tax year. The exclusion in the year of death has increased from R300,000 to R440,000.
The primary residence exclusion has been increased from R2 million to R3 million.
There are no changes to the capital gains tax percentages or effective rates.
5. Donations tax
The annual donations tax exemption has been increased from R100,000 to R150,000 per tax year, while the applicable tax rates remain unchanged at 20% (up to R30 million) and 25% (above R30 million).
Contact us to review your financial plan and ensure your investment strategy remains tax-efficient under the new 2026 regulations.
