Small Business Focus

How to pay less tax by writing off 100% of an investment in a small business

You can only invest in businesses with an asset value of less than R50 million.

Pavlo Phitidis, Aurik Business Accelerator

There are seven things you need to look out for [when considering investing in a Section 12J business]…

Pavlo Phitidis, Aurik Business Accelerator

Section 12J of the Income Tax Act allows investors to write off 100% of their investment in a registered company from their taxable income.

Towards the end of 2017 there were more than 60 registered Section 12J companies.

There is no cap on how much an investor may invest in a registered Section 12J company.

As long as the investor holds the shares for five years, the initial tax benefit will not be recovered by Sars.

The Money Show’s Bruce Whitfield interviewed Aurik Business Accelerator’s Pavlo Phitidis to discuss Section12j for his weekly small business feature.

Phitidis touched on why and how Section12j was created, as well as the ins and outs of investing into small businesses.

He gave advice on investing in a way that manages risk and return.

Listen to the interview in the audio below (and/or scroll down for more quotes from it).

Debt in a small business isn’t useful...

Pavlo Phitidis, Aurik Business Accelerator

Do you believe in the business? Do you believe there’s a good future for them? Make sure you have some sort of affinity for it.

Pavlo Phitidis, Aurik Business Accelerator

The most difficult thing… is how are you going to exit the small business?

Pavlo Phitidis, Aurik Business Accelerator

Look at the underlying asset class. And look at the fund manager…

Pavlo Phitidis, Aurik Business Accelerator

It’s really hard to liquidate your investment in an SME.

Pavlo Phitidis, Aurik Business Accelerator

Click here (then “like” the page) to follow Bruce on Facebook.

Enter your email address in the form below to receive a newsletter containing the most-read articles of the week from Bruce Whitfield’s The Money Show every Friday morning in your inbox.

Subscribe to our Business Wrap Newsletter


Recommended

by NEWSROOM AI
Read More
How to manage a business partner with views and goals different from yours

How to manage a business partner with views and goals different from yours

The Money Show’s Bruce Whitfield interviews small business guru Pavlo Phitidis, founder of Aurik Business Accelerator.

Allowing more skilled foreigners into SA will make us all more prosperous

Allowing more skilled foreigners into SA will make us all more prosperous

In one bold move, South Africa can secure leadership on the Continent while fixing our skills shortage, says Pavlo Phitidis.

'Emigration is draining skills, destroying the future of South Africa’s economy'

'Emigration is draining skills, destroying the future of South Africa’s economy'

Small business guru Pavlo Phitidis shares shocking anecdotes and advises business owners on how to address this challenge.

South Africa is flirting with recession. Again. How to 'create your own economy'

South Africa is flirting with recession. Again. How to 'create your own economy'

The timing could not be better to create your own economy, says small business guru Pavlo Phitidis.

Why 'waiting for things to get better' is too risky a strategy to try

Why 'waiting for things to get better' is too risky a strategy to try

Dr Seuss called it "the waiting place"; it kills businesses, warns small business guru Pavlo Phitidis.

Marketing is becoming the single most important key to success in small business

Marketing is becoming the single most important key to success in small business

'Marketing' is not 'sales'. It’s not noise. It's a science, and you must get it right, says Pavlo Phitidis.

Popular articles
Western Cape has the most 'clean' municipalities in South Africa

Western Cape has the most 'clean' municipalities in South Africa

Only 18 municipalities (out of 257) got a clean audit. Twelve of them are in the Western Cape, says auditor-general Kimi Makwetu.

Not a single clean audit for Free State, North West or Limpopo #AGReport

Not a single clean audit for Free State, North West or Limpopo #AGReport

Eighteen out of the 257 municipalities achieved a clean audit, 12 of them were in the Western Cape.

'Domestic workers are entitled to 21 consecutive days of paid annual leave'

'Domestic workers are entitled to 21 consecutive days of paid annual leave'

Socio-Economic Rights Institute's Kelebogile Khunou says for living-in workers you cannot deduct more than 10% for accommodation.

The EFF is behaving like Zodwa Wabantu in Parliament, caller tells Eusebius

The EFF is behaving like Zodwa Wabantu in Parliament, caller tells Eusebius

702 listeners on the Eusebius McKaiser show share their views on the conduct of the political parties during the Sona debate.

[WATCH] SA youth choir shines on America's Got Talent with 'My African Dream'

[WATCH] SA youth choir shines on America's Got Talent with 'My African Dream'

The Ndlovu Youth Choir's beautiful performance got 4 yesses from the judges, including Simon Cowell!

TymeBank CEO Sandile Shabalala quits

TymeBank CEO Sandile Shabalala quits

Shabalala says he wants to spend more time with his family. Bruce Whitfield interviews portfolio manager Kokkie Kooyman (Denker).

Average salary in SA is R6400 per month, but 70% of workers earn less

Average salary in SA is R6400 per month, but 70% of workers earn less

About 29% of workers earn less than the R3500 national minimum wage, says Anish Shivdasani, CEO at Giraffe.

Discovery Health acted illegally and a patient died - Medical law consultant

Discovery Health acted illegally and a patient died - Medical law consultant

Shafrudeen Amod from Medisyn Clinical Consulting says the scheme could have paid the patient directly.

Investec gives staff unlimited leave days and freedom to wear what they want

Investec gives staff unlimited leave days and freedom to wear what they want

The bank rewards innovation with substantial bonuses and pays according to output not hours at work, says Lesley-Anne Gatter.