12J 2020 Prospectus Window Now Open

by Johannes Maree


Section 12J

ATTENTION ALL MEMBERS – LIMITED OPPORTUNITY!  12J PROSPECTUS WINDOW OPEN UNTIL 29 FEB 2020!

  • Invest and get a 100% tax deduction.
  • Earn up to 45% in immediate, guaranteed returns through this SARS incentive. 
  • Don't miss out on this opportunity - make use of this unique incentive from SARS to incentivise taxpayers to invest in the South African economy.
  • Our public prospectus window is open until 29 February 2020 – which means the R1m usual minimum investment required has been lowered to R100 000.

A testimonial from one of our very first investors, Mr. Coert Coetzee himself:

“One of, if not THE best investments I've ever made.  And it took me less than 5 minutes!  I filled out the application, made the deposit, and sat back while my accountant sorted out my tax claim!  I've personally invested in Destinata Capital's 12J fund and cannot be happier about my investment decision.” – Coert Coetzee.

Yes, it's that time of the year again – the last few weeks before the end of the tax year.  And once again, the 12J investment opportunity at Destinata Capital Ltd has been opened up to the public. 

Thus far, the existing investors have enjoyed the benefit of earning brilliant upfront returns through tax savings, refunds and bi-annual dividends.  The 1st interim dividend in 2019 was at 5% bi-annual, thus equivalent to a 10% annual dividend – pair that with the upfront returns and the returns generated… 

If you're not familiar with the 12J concept yet – have a quick look at this 5 minute explainer video (by far the most-watched 12J-related video on YouTube with 51k views already):

https://www.youtube.com/watch?v=iO97ELuEsHU&t=22s

I also think a quick recap through some FAQ's is in order:

How does a section 12J tax deduction work?

An investor qualifies for a deduction equal to the amount invested in a 12J VCC, duly registered with the FSB and SARS, in the tax period the investment is made.  The effective saving for the taxpayer is therefore the amount of the investment multiplied by his or her marginal tax rate.

When do I need to make the investment?

In the tax period you wish to claim the deduction in, e.g. if your financial year end is 29 February 2020, you need to make the investment, and have the cash paid over, on or before 29 February 2020.

Can I reinvest dividends, and will such an additional investment also quality for the deduction?

A number of our existing shareholders have opted for this during the last year.

What differentiates Destinata from other VCC's?

Destinata Capital is a public company that, from time to time, issues a public prospectus in line with the Companies Act 71 of 2008, which allows the investor to make a minimum investment below the R1m threshold that is applicable to VCC's that have not issued a prospectus, opening the investment opportunity up to a much larger investor base.

Can I view my tax savings as part of my return on investment?

Yes, you can.  See the following illustrative example:

Mr A falls within the 45% tax bracket.  In year 1 he invests R1 000 000 in a VCC.  In that same year he receives a dividend of R200 000, which he reinvests.  The total effect for Mr A is as follows: 

Own cash invested: R1 000 000    
Tax saving:  R540 000   [(1 000 000 + 200 000) * 45%]
Actual cost, after tax deduction effect: R460 000 [1 000 000 – 540 000]
Value received (investment + dividend): R1 200 000 [1 000 000 + 200 000]
Return on Investment [ROI] (Year 1): 161% [(1 200 000 – 460 000) / 460 000]

Therefore, the effective ROI achieved is substantially better than the 20% dividend received.

In subsequent years, should a 20% dividend still apply, assuming no growth in the value of the investment, the effective ROI will be: 43% [200 000 / 460 000]

Are recoupments applicable?

By claiming the 12J 100% tax deduction upon making the investment, the tax value or base cost of the investment becomes R0.  If the investment is sold within 5 years, a recoupment will be applicable.  If held on to for more than 5 years, when sold, only capital gains tax will be applicable.

What are the steps to invest?

STEPS TO INVEST AND YOUR CLAIM TAX DEDUCTION:

  1. Complete Application Form
  2. Send to info@destinataholdings.com
  3. Make payment as instructed on the application
  4. Use the 12J Certificate we will issue to claim your 100% tax deduction

For ease of use we've included a link to our prospectus page: 

https://www.destinataholdings.com/prospectus-1-of-2020/

There you have it – as easy as that!  If you're interested to make use of this opportunity, or would like to find out more, go to our prospectus page or contact us at:

(e)  info@destinataholdings.com

(t)  021 851 3590

For further ease and info, find attached the following:

  1. Fact Sheet (2-page overview of the fund)
  2. Application Form
  3. Prospectus 1 of 2020

The contents of this communique should not be construed as investment, tax, legal, accounting and/or other advice. For advice on these matters consult your preferred adviser. Destinata Capital Ltd (VCC-0073 FSP 48729) is an authorised financial services provider and is a SARS approved Venture Capital Company.




 
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