Podcast: Tax creep

In Latest, The Fat Wallet by Kristia van Heerden

There’s more than one way to raise taxes. You can subject yourself to the ire of the masses by being up-front about it, or you can eke out little tax wins on the sly. Our government likes to do a bit of both.

This week, with the help of Wesley, we explain how tax creep works and what you can do about it. We also talk about lump-sum withdrawals. You are taxed on previous withdrawals taken after the following dates:

  • Withdrawals: 1 March 2009
  • Retirement benefits: 1 October 2007
  • Severance benefits: 1 March 2011

If you took lump sum withdrawals before these dates, consider that an entry for your gratitude journal.


It’s been 6 years since the lump sum benefit was last adjusted and we have lost 26.5% of the value of the incentive during this time. Where is my inflation adjustment? Obviously someone is desperate for cash right now, and SARS doesn’t think it is pensioners.

When the lump sum is adjusted from 300k to 500k, but you already took 300k in the past, what happens when you take a 200k lump sum from your other RA account?

More complicated. Was 300k, take 400k, pay 18% tax on 100k = 18k tax. Now the limit is 500k. take another 300k lump sum from your other RA account.

What on earth happens?

Do you not get any benefit from the increase?

Does 100k at 18% wipe out half of your new 200k tax free lump sum?

Or do you treat it as a 700k lump sum on the new provisions less 18k tax previously paid on lump sums.

It seems like a good idea to have at least 2 RA accounts.

The bleeped show is below.

Win of the week: Candice

Just thought I’d say a HUGE thank you.  After being introduced to the show just 3 years ago, I feel like we are in a committed relationship. It’s the only podcast I listen to and look forward to my Monday morning drive to work with you guys. 

I finally budgeted.  I’m horrified to see where our money goes monthly.  I can’t complain though, because without knowing I wouldn’t be able to change spending habits.


I’ve always championed Total Return ETFs. Outside a TFSA you’d have to pay Capital Gains Tax. TRTs also save on brokerage costs and admin. However, the feedback from De Wet has me reconsidering that approach.

If the fund is a feeder fund like the Satrix MSCI World, is there any local tax event? To me, it makes sense that if they just reinvest the distributions they receive outside SA the only tax event would be in the foreign country. Your only local tax concern then is CGT.

It is possible to switch from Satrix to 1invest MSCI world at an increase in fees of 0.05% and then have dividends paid out. This leaves an increase in brokerage costs and personal admin. 


I’ve been putting money into the Satrix World. As I understand it, I lose the benefit of the saving on dividend tax in a Global ETF, but I’m at least hedged in a way with the rand weakening over time, and it should show better growth over time than local (who knows though). 

So I just listened to your podcast (Asset Allocation Problem – 14/12/20) regarding total return funds (like MSCI World). Am I correct in my understanding that the dividend tax is in the region of 28%, not 15%? Furthermore, are we saying that tax free investments should pay out the dividend, and not reinvest? That feels wrong though, that money then can’t keep growing?

Then, to make matters worse, when you Google “tax on tax free global etf”, you get many links proclaiming that you do not pay ANY tax on either local or foreign tax free investments, e.g. https://www.sygnia.co.za/press/how-to-invest-offshore-and-pay-zero-tax

Please put me out of my misery on this one!


I have the *honour and privilege* of working for a financial institution that recently decided all employees must close all accounts with other brokers and open a stockbroking account with them. Exceptions may be approved, but I don’t want to open that can of worms just yet.

I have EasyEquities accounts – both an Easy Equities ZAR account with individual shares and a TFSA account with a few ETFs.

Does Easy Equitites count as a stockbroker in this case? Should I just sell the individual stocks and hope they’ll let me keep the TFSA? Does the TFSA fall under this prohibition as well? And why is it that they can legally do this?

I have zero energy for the admin of moving and the inevitably higher fees, preferential staff rate or not.


Normally I put my TFSA allocation of R3000 per month into my bond. At the end of the financial year I draw R36000 and buy the Ashburton Global 1200 ETF in my TFSA.

Should I still be doing so for the coming year? Is this still the one ETF to rule them all?

The Fat Wallet Show with Kristia van HeerdenThe Fat Wallet Show is a no-nonsense personal finance and investment podcast hosted by Kristia van Heerden and Simon Brown. Every week we answer questions by a growing audience of finance enthusiasts. Submit your pressing money and investment questions to ask@justonelap.com.

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