For many investors, the benefits of Tax-Free and Tax deductible investment options are very appealing. We have just launched our very first Section 12J investment opportunity on the platform, brought to by the team from The Grovest Group and SunStone Capital. The full amount invested in Grovest is 100% deductible from your taxable income in the year in which the investment is made. This applies to individuals, companies and trusts.
The 2008 South African Budget Review found that one of the main challenges to the economic growth of small and medium-sized businesses was access to equity finance. Through Section 12J, the South African Government aims to stimulate the economy and promote investment in South African private companies, whilst providing tax benefits to investors. Section 12J is designed to encourage individual and corporate investors to invest in a range of smaller, higher-risk trading companies by investing through the Venture Capital Companies (VCCs)
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For investors with a higher risk appetite, or who have maxed out their Retirement Annuity, Pension Fund and Tax-Free Savings Account contributions, a Section 12J Investment into a SARS approved Venture Capital Company (VCC) is the perfect way to allocate capital in a tax free way in order to maximise your tax deductions. Any investment into a Section 12J Venture Capital Fund is fully tax deductible. This means that if you are in the top tax bracket, SARS is willing to give you up to 45% of your investment back!
The Grovest Group continue to be the pioneers, prominent leaders and innovators of Section 12J policy in South Africa. Acting as administrative manager for more than 40 Venture Capital Companies (“VCC’s”), making up a large portion of active VCC’s in the South African market as well as being the managers and promoters of 8 VCC’s of their own.
Who is Growvest
This is where Sunstone Capital comes in. They assist commercial fleet operators by moving from traditional hire-purchase agreements to a rental model resulting in lower administrative costs and improved operational efficiency. Sunstone invests in qualifying companies that own and rent out vehicles to the fleet operators.
We did this interview with Grovest to educate new investors on what they will be investing in.
The investment is a longer term strategy and would require investors to invest for a minimum of 5 years, however, the fund aims to provide investors with a high annual dividend return of between 7% and 9%. All the FAQ's, information sheet and prospectus available here.
Here you will find all the information around what a J12 Investment is all about.
Until Next Time
Grovest is a Authorised financial services providers Registration number 2017/418473/06 | FSP number: 48870 | VCC number: VCC-0101