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The 2022 tax year ends at the end of this month, which is a great time to review your investments and consider taking full advantage of the government incentives that help us save.

One of these tax incentives is linked to your retirement annuities (RAs). While a well-invested RA is not only good for your long-term financial wellbeing it also offers an immediate reduction in your tax liability. As the 2022 tax year comes to an end, it may be time to consider topping up your RA with an ad-hoc, or once-off additional contribution that can significantly reduce your tax.

3 benefits of contributing towards a RA

Tax deductions

RA contributions are tax-deductible (subject to certain limitations) and therefore reduce your taxable income. For RAs, deductible contributions are limited to 27.5% of your annual taxable income, capped at R350 000 a year. You can contribute more to your RA but once you reach the limit your contributions carry over to be automatically deducted in future years.


Because your RA’s growth isn’t taxed, capital gains, dividend withholding tax and compound interest aren’t taxed. This means your investment value can potentially be higher than a unit trust.

Excluded from estate duties

RA’s are not subject to estate duty and there are various options your financial advisor can assist you with for the benefit of your estate’s beneficiaries.

Topping up your retirement annuity provides various income tax benefits.

For assistance to maximise yours, contact us today.

Top up your RA to save on tax

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