World-class investment options for amnesty clients

Introduction

Individuals,Trusts and CC's in contravention of exchange controls can apply for amnesty between 1 June 2003 and 29 February 2004, in terms of the Exchange Control Amnesty and Amendment of Taxation Laws Act of 2003.

Under the tax amnesty, investors will have to declare their income, including foreign assets and liabilities, in their tax returns. If the unauthorized funds are more than the R2 million offshore allowance allowed for individuals, amnesty applicants will be subject to a one-off levy of five percent for funds being repatriated to South Africa or ten percent for clients wishing to leave their money offshore. A levy of two percent will apply to taxes not paid on undeclared amounts that were placed offshore.

The problem

Investors, who do not want to repatriate their legalized money, will be liable for tax  as from 1 March 2003. The South African Revenue Service (SARS) will require full disclosure of all foreign income and capital gains for the tax year ended 28 February 2004 and every year thereafter. Each credit of interest and dividends would also need to be declared.

Investors will also be faced with practical problems such as where to invest, how transactions will be conducted and how to obtain information about offshore investments.

The solution

Sanlam has developed an innovative offshore investment option for investors who wish to keep their money offshore once they have been granted amnesty. Single premium investments may be made directly into the Stratus International Endowment in US Dollars, Pound or Euros, in Sanlam Jersey.

After the initial five-year period, the proceeds of the investment can be converted into the foreign currency of choice. There are six funds to choose from, ranging from money market funds in pounds, dollars or euros, a low volatility hedge fund, a balanced fund or an equity fund, all of which are truly globally invested.
 

The benefits

• Sanlam will take away the administrative burden of declaring income and capital gains from the legalised funds to SARS, by paying the tax in the policyholders' fund. The proceeds of the investment will therefore not be subject to further income or capital gains tax in the hands of the client.
  

• The investment will be taxed at the policyholder's fund tax rate of 30%, which is likely to be less than the individual's marginal tax rate, translating into a substantial tax saving for clients.
  

• Easy access to information on your investment's performance and to the investment expertise of a reputable South African financial services organization.
  

• High allocation on the single premium invested.
  

• All funds adopt the multi-manager investment approach, which means the country's top fund managers actively manage the investments for the benefit of our clients.

 

Contact details

Sales/ Product related information:  0860 223 390
Fax: (021) 947-9864
Information on existing policies: 0860SANLAM /  0860 726 526
Fax: (021) 947-9440
International tel:  +27 21 916-5000
International fax: +27 21 947-9864
E-mail:  stratus@sanlam.co.za