It's time to review your finances

By Staff Writer

From Personal Finance

February 23, 2008

By Laura du Preez

Short-term factors - such as the volatility in the markets that was
manifest again this week - should not stop you from holding to the
course towards your goals.

But what the minister did not say this week is that, like any good
skipper, you need to take note of the changing conditions at sea and
plot your course carefully.

The Budget Manuel presented and the proposed changes to tax legislation
that accompanied the Budget will necessitate a review of many aspects
of your finances and financial planning over the coming year. You will
need to review:


Your personal budget. Your March pay cheque will reflect the changes
Manuel announced to the personal income tax tables.

Your tax deduction should be lower, a result of the new rates, and
possibly because of the increase in the amount you are allowed as a tax
deduction or to receive tax-free from an employer for medical scheme
contributions.

But don't make spending plans for the additional cash you may have next
month. Manuel also announced some measures that will impact negatively
on your personal budget, most notably the levy on electricity and the
increases in the fuel levies. 


Although it will be difficult to quantify these increases immediately,
you should have room in your budget to accommodate these changes.


Your savings plans, because the interest income you can receive tax-free
each year has been increased.

Your retirement plans. A major review of your retirement plans is likely
to be necessary later this year when details of the government's plans to,
among other things, change the maximum amounts you can contribute to a
retirement fund and enjoy as a tax deduction are announced.

In addition, you may want to make small adjustments to the projections you
or your financial adviser have made on how your retirement savings will
perform in light of this week's announcement that retirement funds will not
pay dividend tax.


Your estate plan. There will be a review later this year of estate duty paid
by the estate of a person whose life is assured as a result of life policy
payouts. The South African Revenue Service plans to exempt life assurance
payouts up to a certain amount and also to give uniform relief from tax on
pension fund death benefits so that the unwary enjoy the same benefits as do wealthier people, who use sophisticated strategies to reduce their tax liability.


Your small business taxes. If your small business has an annual turnover of
less than R1 million, you will probably want to take advantage of the turnover
-based tax system that was announced this week and the removal of the need to register for value-added tax.
 

Recent Articles

Featured Rating agencies may come knocking

It is only the middle of February, but the rand has already made two big moves. The first was the rand moving from R14.60 to R 13.20 at the beginning of the year, as emerging markets (EM) became fashionable again. The second was where the rand gave away nearly 90 cents in 2 weeks as the EM rally ran out of steam, and local events started to hit the headlines.

Read more

The cost of sending money home to neighbouring countries

Transferring money home within the Southern African Development Community (SADC) provides vital financial support for many households in neighbouring countries.

Read more

Student bank accounts: Which come out on top?

Being a student signals budgeting and not having a lot of money at your disposal. This means streamlining expenses such as your grocery costs and entertainment budget. But what if your bank account is in fact costing you more than you can afford?

Read more

Can you afford an ambulance in South Africa?

When a loved one is straddling the line between life and death, you won’t hesitate to call an ambulance. This week, Justmoney found out how much an ambulance ride costs in South Africa, whether you can refuse to get into an ambulance, and who pays the bill if you’re unconscious. 

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

President Hotel Easter Special

Price: From R1,500
When: 15 March to 30 April
Where: Cape Town

Kulula-Preskil Island Resort Special

Price: R16,999
When: 11 May -14 September
Where: Mauritius

A Touch Of Madness Tuck In Tuesday Special

Price: R70
When: Tuesdays
Where: Cape Town