Tax Season: Take advantage of your RA & TFSA

Geo Botha • January 27, 2026

28 February marks the end of the tax year.


If you have some extra funds available, this might be the perfect time to consider adding to your savings in a retirement annuity (RA) or tax-free savings account (TFSA), thereby enjoying the significant tax benefits these products offer.


Below are the benefits of both an RA and a TFSA, as summarised by our partners at Ninety-One. As always, please contact your personal financial adviser to assist you in calculating the amount you can still contribute, as well as whether this will be best for your portfolio and personal situation:


Why invest in an RA?


1. RAs can be viewed as gifts from the taxman.

For example, at a 45% marginal tax rate, a deductible RA contribution of R100 000 can generate up to R45 000 in tax relief (within the limits). Tax will be applicable when the funds eventually pay out at retirement, but due to the tax-exempt portion of the lump sum, as well as the tax rebates for individuals over 65 and 75, you may pay less tax at that time.


2. You do not lose your tax benefits, even if you contribute more than the maximum annual tax deduction (excess contributions)

If you contribute more than the maximum (excess contributions), your tax benefit will roll over to the next tax year of assessment. Any excess contributions in subsequent tax years will continue to be rolled over. This means that you could receive a tax benefit at retirement, after retirement, or your beneficiaries could benefit when you have passed away, as explained below.


RA contributions and tax


Before retirement
When contributing to an RA, your maximum tax deduction for the year is the lesser of:

  • R350 000
  • 27.5% of the higher of remuneration or taxable income
  • Taxable income excluding taxable capital gains


At retirement
If you elect to receive a lump sum:

  • The remaining excess contributions will be paid out free of tax
  • R550 000 could be tax-free – if not previously utilised


After retirement
Excess contributions remaining after your retirement are deductible from your compulsory annuity income for tax purposes (section 10C of   the Income Tax Act).


After you pass away
If your beneficiary elects to receive the full death benefit, or a portion thereof, as a lump sum:

  • The remaining excess contributions will be paid out free of tax
  • R550 000 could be tax-free – if not previously utilised


 The tax deduction limit applies to the combined total of RA contributions and all member and employer contributions to workplace pension   and provident funds.


3. You enjoy estate-planning benefits.

  • An RA is exempt from estate duty. Please note that excess contributions may be included for estate duty purposes, to the extent that a lump sum is received.
  • The growth on your excess contributions is not subject to estate duty – you can therefore effectively peg the value of your estate (similar to the benefit obtained from a trust, prior to the introduction of section 7C of the Income Tax Act).
  • Over time, the value of excess contributions could be reduced, which would decrease the potential estate duty payable on these excess contributions.


4. No tax is deducted within the investment (no income tax, capital gains tax or dividend withholding tax).

This means you will benefit even more from compounded growth.


5. You remain disciplined with your retirement savings.

The two-pot retirement regime was introduced on 1 September 2024. This system allows members access to a small portion of their retirement savings before they retire, while preserving the remainder until retirement (unless one of the exceptions specified in the Income Tax Act applies). To achieve this, various notional components within a member’s retirement fund benefit or contract were created.


These components are referred to as:

  1. The Vested Component
  2. The Savings Component
  3. The Retirement Component


Members are able to withdraw from the Savings component once in a tax year. Withdrawals from the Savings component are subject to a minimum of R2 000 per withdrawal and are taxed at your marginal tax rate.


6. You have protection from creditors.

This means your savings for your retirement will be available when you need them.


Key considerations when investing in an RA

  • RAs are subject to Regulation 28 investment limits.
  • On the death of the investor, the Board of Trustees will have full discretion when deciding on a fair allocation of the benefit to dependants and/or nominees, in terms of section 37C of the Pension Funds Act.
  • There are liquidity restrictions prior to reaching retirement age. This means that you will only have access to the funds in the Savings component before reaching the age of 55 (unless you qualify for one of the exceptions).


Why invest in a TFSA?

  • TFSAs are exempt from tax on interest, dividends and capital gains.
  • There are no restrictions on withdrawals; however, if you replenish the funds withdrawn, this will count towards your annual and lifetime contribution limits. For this reason, these investments are generally more suited to long-term investing.
  • TFSAs are a great way to save for your child’s education (be aware of donations tax if the annual exemption of R100 000 per donor is exceeded).


Contributions

  • No matter how many TFSAs you have with different product providers, the total combined value of your contributions may not exceed R36 000 per tax year and R500 000 over your lifetime.
  • If you exceed these contribution limits, a penalty of 40% will apply on the amount contributed above the limit, which will be added to your tax assessment.

Familie Finansiële Beplanning. Waarom?

By Dr. Riaan Botha • June 2, 2026
Die uitdrukking “Twee koppe is beter as een” is welbekend en dui daarop dat samewerking voordelig is. Is daar voordele vir lede van ’n familie wanneer hulle gesamentlik familie-finansiële beplanning doen, asook inkomstevoorsiening deur middel van familiebesighede? Familiebesighede in Suid-Afrika, waar gesamentlike finansiële beplanning plaasvind, is ’n belangrike deel van die ekonomie. Talle Afrikaanssprekendes is afkomstig van die platteland waar hulle in ’n familiebesigheidsomgewing op plase grootgeword het. Weens ’n verskeidenheid van redes verander die landbou-familiebesigheidsomgewing, en sommige van hierdie families verskuif hul familiesakebelange met groot sukses na ander sektore van die ekonomie. Entrepreneursvaardighede word egter benodig om vir jouself ’n inkomste te skep. Bovest is behulpsaam om die nodige entrepreneurskundigheid deur middel van die TV-program “Welvaartskeppers” aan die kykerspubliek bekend te stel. Bykomend hiertoe word finansiële advies aan families gegee om sodoende maksimum finansiële voordeel te verkry. Indien die voordele van familie-finansiële beplanning met dié van persoonlike finansiële beplanning vergelyk word, bestaan die volgende voordele: Laer gesamentlike fooie vir familielede kan beding word; Meer effektiewe belastingskale kan benut word deur beleggingskapitaal tussen gades te verdeel; Die oordrag van welvaart na die volgende geslag kan vergemaklik word deur familietrusts te gebruik; Gedeelde verantwoordelikheid bevorder dissipline om by langtermyn-kapitaalbouplanne te hou; Verskillende lewensiklusse en risiko-aptyte help om die familie se beleggingsportefeulje te balanseer; Die verskille in ouderdom en lewensfases ondersteun die uiteenlopende eiendomsbehoeftes van familielede. Aangesien die finansiële beplanning van families meer kompleks is, benodig dit samewerking tussen die verskillende geslagte om behoeftes en verwagtinge te verwesenlik. Die rol van die Bovest-adviseur in hierdie proses kan nie onderskat word nie.

Financial Lessons to Learn from Ultra Trail Running

By Godfried Kotzé • June 2, 2026
This past weekend, Bovest Wealth Management had the privilege of being part of something truly special: a race, a journey, and a family of runners who took part in the MUT - the Mountain Ultra-Trail - in the breathtaking beauty of George. Together with my close friend Scotty, I ran the marathon. But as is so often the case with endurance events, I walked away with far more than tired legs and a medal. I walked away with lessons. Lessons about faith, finances, discipline, consistency, community, fellowship, and perspective. Ultra trail running has a unique way of stripping life back to the essentials. Out there on the mountain, there are no shortcuts. You cannot fake preparation. You cannot outsource endurance. You cannot buy resilience at the final aid station. You have to show up, step by step, climb by climb, kilometre by kilometre. In many ways, our financial lives are no different. Discipline: The Foundation of the Journey No marathon is completed by accident. It requires discipline long before race day. Early mornings, training runs, strength work, nutrition, rest, and preparation all form part of the unseen investment. Financial success works the same way. Building wealth is rarely about one dramatic decision. It is about the daily discipline of living within your means, saving consistently, avoiding unnecessary debt, planning for tax, protecting your family, and making wise investment choices over time. Proverbs 21:5 reminds us: "The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty." Discipline is not always exciting, but it is deeply powerful. It is the quiet commitment to the right things, even when nobody is watching. On the mountain, discipline gets you to the next checkpoint. In your finances, discipline carries you toward long-term freedom. Community: We Were Not Created to Run Alone One of the most beautiful parts of the MUT weekend was the sense of community. Runners encouraged each other. Families supported from the sidelines. Friends waited, cheered, prayed, laughed, and pushed one another forward. With Scotty alongside me, the journey became lighter. The difficult moments became bearable. The experience became richer. The same is true in our financial lives. We need people around us who encourage wisdom, accountability, and growth. A good financial adviser, tax specialist, fiduciary expert, family member, spouse, mentor, or trusted friend can help us make better decisions and remain focused on the bigger picture. Ecclesiastes 4:9-10 says: "Two are better than one; because they have a good return for their labour. For if they fall, the one will lift up his fellow;..." No one builds a meaningful legacy alone. Wealth is not only about numbers on a statement. It is about people, purpose, stewardship, and responsibility. Perspective: Seeing the Creator Through His Creation Perhaps the greatest takeaway from the weekend was perspective. Running through the beautiful mountains of George, surrounded by the majesty of creation, one cannot help but become aware of the greatness of God. The fresh air, the views, the silence, the strength to continue, and the people alongside us all point to something far bigger than ourselves. There were moments on the route where the mighty Name of the Lord could change the entire atmosphere. A prayer, a word of gratitude, a moment of worship, or simply lifting one's eyes to the mountains reminded me that we are not alone. This perspective is essential in life and in finance. Money is important, but it is not ultimate. Planning is important, but God remains our provider. Wealth can create comfort, but only Christ gives true peace. A well-structured estate can leave an inheritance, but a life of faith leaves a legacy. When we see our finances through the lens of faith, everything changes. We become less anxious, more generous, more intentional, and more aware of the responsibility we carry. The Finish Line Matter Every race has a finish line. So does every financial journey. The question is not whether we will reach a finish line, but whether we are preparing wisely for it. Are we disciplined? Are we consistent? Are we surrounded by the right people? Are we walking in fellowship? Do we have the right perspective? Ultra trail running teaches us that endurance matters. Preparation matters. Community matters. Faith matters. The same is true when building, protecting, and transferring wealth. By Godfried Kotze BCom Accounting, MCom Taxation (UP), SAIPA, FISA Member