How it works
Qualifying Investors will invest in Alumni Energy Investments’ (Alumni) approved VCC, in exchange for the issue of Venture Capital Shares and investor certificates and a SARS IT3(c) form for capital gains.
Investors can claim tax deductions in respect of their investments and Alumni will, in turn, invest in qualifying investee companies in exchange for qualifying shares.
This tax relief mitigates the investment risk and amplifies the potential return. The tax impact is demonstrated below:
|Gross investment||R100 000||R100 000||R100 000|
|Tax relief||(R45 000)||(R45 000)||(R28 000)|
|Net Investment||R55 000||R55 000||R72 000|
|Effective % Tax Relief||45%||45%||28%|
If an investment in Alumni exceeds the investor’s taxable income in the year that
the investment is made, the tax loss created can be carried forward to subsequent
Alumni intends to return realised investment surpluses to shareholders by way of
dividends. Dividends paid will be subject to Dividend Withholding Tax.
A return of capital limited to the amount of the initial investment will not be subject to income tax as a recoupment in the hands of an investor provided that the investment has been held for no less than five years.
It is important to note that the original capital returned to investors as well as any capital gains will be subject to Capital Gains Tax.
Subject to the Qualifying Registration Investors will be entitled to deduct the full amount of their investment in Alumni from their taxable income in the tax year ending 28 February 2018.
Would you like to discuss how you can invest in South Africa’s energy future with no risk to your capital? Please let us know using the form below.