Moving your Tax-Free Savings Account

By Janice Roberts

Ettienne Bezuidenhout

Taxpayers who have been diligently using their Tax-Free Savings Account (TFSA) allowance annually can now (since the beginning of last month),  transfer these savings from one provider to another, without it being seen as a new contribution.

This means that you can move your TFSA, and still make a contribution in the same tax year, said Ettienne Bezuidenhout, certified financial planner at Alexander Forbes Financial Planning Consultants.

“The National Treasury allowing the move between TFSA providers has made a fantastic savings product even better, as it provides the investor with the flexibility to compare and utilise the offering best suited to them, taking cognisance of cost, service and portfolio offering,” he added.

“TFSA’s are a truly great product to assist in ensuring your financial well-being through a savings vehicle that allows any individual to save, and pay zero tax on the growth in the investment.”

There are investment limits that apply, currently they are R33 000 per annum per investor and R500 000 over the lifetime of the investor, ensuring that this savings account is not designed purely for the benefit of the super-rich.

TFSA’s allows the general public to access various types of investment vehicles, such as unit trusts, where in the past the cost and/or tax structure may have been prohibitive. It is a great way in which to save on especially Capital Gains Tax, and the longer the term of the investment, the greater the savings.

A word of caution though – Bezuidenhout said not all providers were currently accepting TFSA transfers. “Legally none are allowed to prevent a transfer out, but they are not obliged to accept transfers.” Alexander Forbes allows transfers both in and out, and offers a portfolio selection at attractive rates.

“There may be certain limitations on amounts needing to remain if you only do a partial transfer away from a provider. Speaking to a financial adviser will help you ensure you gain the most benefit from this investment, in order to use this product as part of the overall plan to secure your financial well-being.”


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