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So we managed to live through the first month of 2010 and now that we have finally said our goodbyes to our new year’s resolutions whereto from here! Spending more is out of the question – credit ... what credit? I would like to share with you two important points for consideration and action in February.
1. Most of the questions to me as editor are short term insurance related. Mostly issues pertaining to our own oversights and errors that only come to the fore once we claim. Direct insurers involved in the bulk of these and why .... because of the leading and “incomplete” questions asked when taking on your portfolio.
a. Motor Cars – (new) – did you add top up insurance. Meaning did you get cover for the difference in replacement value and amount owing to the bank. New cars depreciate in first km dramatically?
b. That PC, I-Pod, Camera, string of pearls, etc. you bought in Dubai/Hong Kong/etc. and never declared at customs but which you added to your insurance! Do note that you need to prove ownership at claim stage so an invoice would do but not the “off shore” one as the next question the insurers would ask is your proof of duties and tax paid when you brought these into South Africa and would you have that? If not then they would most probably not pay. So please approach your insurer and clarify that so that if they would not then remove it from your list as you are paying unnecessary premiums on those items.
c. Replacement values vs assured values. Best time of the year to shop around for competitive premiums is now so do revisit your assets – moveable and immovable (do not forget soft items such as clothing and curtainings, etc.) Cars at book value and other goods at replacement values. Certainly a few hundred rand in savings just on ensuring values are correct.
2. It is February – time for provisional tax returns and retirement annuity top up’s.
a. Provisional Tax – if you have rental income, interest received, member of a Close Corporation or Company or Partnership then you should look at your IT12 as you are probably a provisional taxpayer and need to have submitted returns in August (first for 2010 tax year) and February (second for 2010 tax year) – final about June/July. SARS would add penalties and interest if not returned in time. Speak to your tax practitioner.
b. Retirement annuities still offer excellent tax efficient investment opportunities and good financial planning and practice is for those of you with tax “problems’ are to make a “provisional” calculation of your 2010 tax obligations and if possible use the 15% allowance to maximise your investment opportunities. Speak to your broker who can assist with this calculation – either top up an existing RA with a lump sum or take out a new policy (recommend a well diversified portfolio).
You are welcome to contact me for more detailed guidance and tips.
Editor
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