(2) There shall be exempt from normal tax any amount received by or accrued to a natural person or deceased estate or insolvent estate of that person in respect of a tax free investment.
[Subsection (2) substituted by section 29 of Act 25 of 2015 effective on 1 March 2015]
(3) In determining the aggregate capital gain or aggregate capital loss of a person in respect of any year of assessment, any capital gain or capital loss in respect of the disposal of a tax free investment shall be disregarded.
(4) Contributions in respect of tax free investments shall be-
(a) limited to an amount of R36 000 in aggregate for any year or years of assessment during the period of 12 months commencing in March and ending at the end of February of the immediately following calendar year;
[Paragraph (a) substituted by section 9(1)(a) of Act 14 of 2017, by section 7(1)(a) of Act 22 of 2020 and by section 20(1)(a) of Act 17 of 2023 with effect from 1 March, 2024 and applicable in respect of years of assessment commencing on or after that date]
(b) an amount in cash; and
(c) limited to an amount of R500 000 in aggregate.
(5) Any amount contemplated in subsection (2) shall not be taken into account in determining whether a person contributed in excess in respect of the amounts contemplated in subsections (4)(a) and (c).
(6) Any-
(a) transfer of an amount in respect of a tax free investment of a person to another tax free investment of that person; or
(b) amount received by or accrued in respect of a tax free investment,
shall not be taken into account in determining whether that person contributed in excess of the amounts contemplated in subsections (4)(a) and (c) as a contribution in respect of that other tax free investment.
(7)
(a) If during any year or years of assessment contemplated in subsection (4)(a) any person contributes in excess of the amount of R36 000 in respect of tax free investments, an amount equal to 40 per cent of that excess is deemed to be an amount of normal tax payable by the person contemplated in subsection (1)(b) in respect of that year of assessment or the last year of assessment when there is more than one year of assessment during the period of 12 months.
[Paragraph (a) substituted by section 29(1)(b) of Act 25 of 2015, by section 9(1)(b) of Act 14 of 2017, by section 7(1)(b) of Act 22 of 2020 and by section 20(1)(b) of Act 17 of 2023 with effect from 1 March, 2024 and applicable in respect of years of assessment commencing on or after that date]
(b) If any person contributes in excess of R500 000 in aggregate in respect of tax free investments, an amount equal to 40 per cent of so much of that excess as has not previously been taken into account in terms of this subsection shall be deemed to be an amount of normal tax payable by the person contemplated in subsection 1(b) in respect of the year of assessment in which the excess is contributed.
[Paragraph (b) substituted by section 29 of Act 25 of 2015 effective on 1 March 2015]
(8) The Minister shall make regulations prescribing the requirements-
(a) to which any financial instrument or policy as defined in section 29A shall conform for the purposes of constituting a tax free investment;
(b) that must be complied with when a tax free investment is transferred; and
(c) in respect of disclosure by any person contemplated in paragraph (a) of the definition of ‘tax free investment’ in subsection (1) in respect of a tax free investment.
(9)
(a) The Financial Sector Conduct Authority shall be responsible for supervising and enforcing of compliance with any regulations made by the Minister in terms of subsection (8).
(b) The supervising and enforcing compliance contemplated in paragraph (a) shall form part of the legislative mandate of the Financial Sector Conduct Authority.
(c) The Financial Sector Conduct Authority, acting through the Registrar, as defined in section 1 of the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001), in supervising and enforcing compliance as contemplated in paragraph (a), shall exercise any power afforded to the Registrar as defined in section 1 of that Act and in any of the Acts contemplated in the definition of ‘law’ in section 1 of that Act.
[Subsection (9) substituted by section 32 of Act 23 of 2018 effective on 1 April 2018 and applies in respect of years of assessment commencing on or after that date]