Stanlib Unit Trust Tax-Free Savings Account Review 2023

The Stanlib Unit Trust Tax-Free Savings Account is an investment vehicle that offers tax-free benefits to investors. To open the account, an investor must contribute a lump sum of R5,000.00 or set up a minimum monthly debit order of R500.00 or a maximum of R3,000.00.

The Stanlib Unit Trust TFSA is exempt from capital gains, dividends, and income taxes. The account has no performance or initiation fees associated with it.

The maximum annual contribution allowed for the Stanlib Unit Trust Tax-Free Savings Account is R36,000.00, with a lifetime contribution limit of R500,000.00. However, investors can be penalized by SARS for overinvestment. If an investor invests more than R36,000.00 per year in a Stanlib TFSA or other tax-free accounts, SARS will impose a 40% penalty.

If an investor invests less than the annual limit, the unused portion of the annual limit cannot be carried forward to the following year.

The Stanlib Unit Trust Tax-Free Savings Account invests in a variety of unit trusts managed by Stanlib. TFSA holders can switch funds from one account to another without affecting the annual limit, allowing investors to take advantage of market inefficiencies.

The Stanlib Unit Trust Tax-Free Savings Account offers flexibility, as the funds in the account are available at any time. Withdrawals do not affect the lifetime limit, but the maximum contribution limit is not extended.

The account is a good option for saving before or during retirement. A living annuity can be set up using the account, and withdrawals from the account are tax-free at retirement. If an investor has reached the retirement annuity contribution limit for tax deductions, this account can also be used for retirement planning without incurring any tax liability.

The Stanlib Unit Trust Tax-Free Savings Account invests in a variety of unit trusts with varying levels of risk, including those managed by Sanlam, Satrix, Coronation, Ned Group, Ninety One, and other companies. Account holders have the flexibility to choose from these options.

List of Unit Trust where the Stanlib unit trust Tax-Free Savings Account can invest in:

• Stanlib Balanced Cautious Fund.
• Stanlib Absolute Plus Fund.
• Stanlib Money Market Fund.
• Stanlib Income Fund.
• Stanlib Flexible Income Fund.
• Stanlib Extra Income Fund.
• Stanlib Enhanced Yield Fund.
• Stanlib Bond Fund
• Stanlib Euro Cash Fund.
• Stanlib European Equity Fund.
• Stanlib Global Balanced Cautious Fund.
• Stanlib Global Feeder Fund.
• Stanlib Global Balanced Fund.
• Stanlib Global Bond Feeder Fund.
• Stanlib Global Bond Fund.
• Stanlib Global Emerging Market Fund.
• Stanlib Global Equity Feeder Fund.
• Stanlib Global Equity Fund.
• Stanlib Global Property Fund.
• Stanlib Global Property Feeder Fund.
• Stanlib Sterling Cash Fund.
• Stanlib USD Currency Fund of Funds.
• Stanlib Global Aggressive Fund.
• Stanlib Offshore America Fund.
• Stanlib US Dollar Cash Fund.
• Stanlib Global Multi-Strategy Diversified Growth Fund.
• Stanlib Global Growth Fund.
• Stanlib Property Income Fund.
• Stanlib Equity Fund.
• Stanlib Enhanced Multi Style Equity Fund.
• Stanlib Core Multi Style Equity Fund.
• Stanlib Balanced Fund.

Advantages of Stanlib Unit Trust Tax-Free Savings Account

The Stanlib Unit Trust Tax-Free Savings Account offers several advantages to account holders, including:

• Flexibility: The account can be used to invest in a variety of Stanlib unit trust offerings, including those that are offshore. Account holders can select an investment based on the level of risk they are willing to accept.
• Tax Benefits: The amount of the investment is not subject to income tax, dividend tax, or capital gains tax. This means that investors can benefit from the tax-free growth of their investments.
• Free Fund Transfers: Transferring funds from one unit trust to another is free of charge, allowing investors to take advantage of market inefficiencies.
• Affordable Contributions: Contributions are very affordable, beginning at R500.00 per month for those who wish to contribute via monthly debit order. There is no income requirement to qualify for the account.
• Investment Variety: The account can be used to make investments in other companies’ unit trusts, and there are no broker fees charged when opening the account.
• Access to Funds: The money in the account can be accessed at any time, providing account holders with flexibility and liquidity.

Disadvantages of Stanlib Unit Trust Tax-Free Savings Account

• The Stanlib Unit Trust Tax Free Savings Account also comes with some disadvantages, including:
• Contribution Limits: The account comes with an annual limit of R36,000.00 and a lifetime limit of R500,000.00 which limits the contributions to the investment.
• Penalty Fees: Failure to meet the contributions limit results in 40% tax on excess amounts being invested.
• Platform Fee: The account comes with a platform fee which is charged at a flat rate of 0.20%.

Conclusion

The Stanlib Unit Trust Tax Free Savings Account offers several advantages to account holders, including tax benefits and flexibility in investments. However, account holders should be aware of the contribution limits, penalty fees, and platform fees associated with the account. Investment decisions should be made with caution, as the account doesn’t come with any guarantees. Overall, the account is a great option for those who want to save money tax-free in South Africa and can be used to save for retirement.