Page 71 - SAIT Compendium 2016 Volume2

General
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INCOME TAX ACT: REGULATIONS ANd NOTICES General
A product provider may only charge a fee that is expressed as a percentage of the value of the tax free investment that is not—
(a) directly or indirectly commensurate with or linked to the amount received by or accrued to the investor
in respect of any tax free investment other than any amount repaid to the investor that was contributed in
respect of the tax free investment; or
(b) calculated with reference to the period of time for which the tax free investment is held by the investor
other than a fee referred to in regulation 12.
If an investor must make repetitive payments of amounts at regular intervals in terms of a tax free investment, an issuer may not charge any fee if that investor
(a) does not pay all of those amounts;
(b) ceases to pay those amounts;
(c) pays any amount less than any of those amounts;
(d) pays a part of the sum of all those amounts; or
(e) pays the sum of all those amounts.
Fees in respect of withdrawal
12. A product provider may not on withdrawal of an amount from a tax free investment charge a fee that exceeds—
(a) in the case of a tax free investment with a guaranteed return, the higher of—
(i) R 300; or
(ii) an amount that must be determined in accordance with the formula
X = A × _B_ × (D – E) C
in which formula—
‘X’ represents the amount to be determined;
‘A’ represents the total amount of the value of the tax free investment at the time when the amount is withdrawn; ‘B’ represents the number of days remaining until the maturity date of the nancial instrument;
‘C’ represents the number 365;
‘D’ represents the interest rate in respect of the zero coupon nominal bond curve that is published daily by the
JSE limited with the same maturity date as the tax free investment at the time of withdrawal;
‘E’ represents the interest rate in respect of the zero coupon nominal bond curve that is published daily by the JSE limited with the same maturity date as the tax free investment on the date that the tax free investment
was acquired;
(b) in the case of a tax free investment with a xed term of ve years or longer and with no guaranteed return, an
amount that must be determined in accordance with the formula X = _A_ × C × _D_
BE
in which formula—
‘X’ represents the amount to be determined;
‘A’ represents the amount withdrawn in respect of which the fee is charged;
‘B’ represents the total amount of the value of the tax free investment at the time when the amount is withdrawn; ‘C’ represents the amount of R 500;
‘D’ represents the higher of—
(i) the number zero; or
(ii) a number equal to the number 1825 less the number of days that the tax free investment has been held;
‘E’ represents the number 1825; or
(c) in the case of a tax free investment with a xed term of less than ve years and with no guaranteed return, an
amount that must be determined in accordance with the formula X = _A_ × C × _D_
BE
in which formula—
‘X’ represents the amount to be determined;
‘A’ represents the amount withdrawn in respect of which the fee is charged;
‘B’ represents the total amount of the value of the tax free investment at the time when the amount is withdrawn; ‘C’ represents the amount of R 500;
‘D’ represents the number of days remaining to the date of maturity on the date of withdrawal;
‘E’ represents the total number of days between the date that the tax free investment is acquired and the
maturity date of the tax free investment.
Part VII Composition of tax free investment
Requirements in respect of composition of certain tax free investments
13. (1) Where any part of the value of a tax free investment is determined directly or indirectly with reference to any nancial instrument that is a share—
(a) not more than 10 per cent of the value of that tax free investment may be derived from shares in any single company; and
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