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The current annual interest exemption will increase from R21 000 to R22 300 for taxpayers under the age of 65 and from R30 000 to R32 000 for taxpayers aged 65 years and older.
Foreign interest and foreign dividends are only exempt up to R3 700 out of the total exemption.
Most Dividends received by individuals from foreign entities are taxable. Interest is exempt where earned by non-residents who are physically absent from SA for 183 days or more per annum and who are not carrying on business in SA.
Comment:
This interest exemption encourages a culture of savings and assists retired South Africans who invest in fixed- interest investments. A pensioner and his or her spouse (both over the age of 65) can invest R600 000 at an Interest rate of 8.5% per annum. They will not pay tax on the combined interest income of R51 000 earned the tax year.
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