• Your staff has persuaded me to lodge the insurance claim. I am very grateful for your assistance.

    Mrs. MM, Milnerton, South Africa

  • A very good and highly interesting newsletter. Your publication leaves anything else in the dark.

    Mr. JK, Duesseldorf, Germany

  • Excellent service – thank you very much!

    Mr. KZ, Contantia, South Africa.
  • Thanks for your help and great professional immigration service. I am excited to be able to stay in South Africa.

    Mr. LS, United Kingdom

  • I have never experienced such an efficient handling of a claim. We are very happy and will recommend your services.

    Mrs. K, Somerset West, South Africa.
  • My claim was handled so fast – no insurance company in Germany could ever compete with your service.

    Mrs. RK, Sea Point, South Africa

  • We have built a very good and pleasant business relationship over the years. A very recommendable company for all insurance needs. I am looking forward working with you.

    Mr. JS, Cape Town, South Africa.
  • Congratulations to your immigration guide. We have not found anything close that is so informative and hands-on.

    Mr. & Mrs. AC, Munich, Germany

  • Compared to the claims settlement of German insurance companies, it was amazing to see how fast you settled my claim. Thanks a million!

    Mr. H., Constantia, Cape Town

  • Thanks for your newsletter, which we find very interesting and informative.

    PH, Loenberg, Germany

news
SwissFin Newsletter March 2010 Print
Dear Readers,

We welcome you to our first Newsletter for this year.

The focus of this newsletter is the summary of the recent Budget Speech by our new Finance Minister. Given the state of the South African economy, it was not surprising that no major changes took effect.

In addition you will find some useful information on taxes and short-term insurance.

We hope you enjoy the reading, with best regards,

Your Swissfin - Team

Contents

1. Investments
2. Taxes
3. Short-Term Insurance
4. Health Care Cover
5. Immigration
6. Other

1. Investments

Bank deposits, insurance plans and tax-free investment amounts

Interest rates

Swiss Financial Consulting offers the following rates as of the end of March 2010:

Bank Deposits:

Money Market		 36 Months 48 Months
8.09% 8.05% 8.5%

Please contact our office for more information. Conditions apply.

Insurance Plans: "Guaranteed income plans" (5 year term):

Gross yield Taxes payable Maximum tax-free investment amount
8.07% Nil R 4'331'000 (under age 65)
R 6'727'000 (over age 65)

Tax-free interest income - max. investment amounts:

R 991'000 each for taxpayer under age of 65

R 1'506'060 each for taxpayer under age of 65

Underlying assumptions: 8% effective interest. Couples married in community of property can double these amounts.

Comment

There has been very little change in interest rates since our last newsletter in November 2009. Unfortunately, we have not seen any further interest rate reductions by the Reserve Bank and we will soon know if the downward trend of interest rates has come to a halt. Worldwide interest rates will rise slowly and South Africa may have to follow such trend.

Swiss Banking Secrecy - the German State buys stolen data

The identity of the seller of a CD with data of Swiss bank clients has not been released. The German State paid € 2.5m to the seller of the data and is evaluating whether they can legally proceed against tax evaders.

Whilst we believe that the CD with the data does exist, the German tax authorities have already achieved what they wanted, as almost 10000 Germans came forward and made a self-declaration of undeclared assets. The CD itself only contained data of 1700 clients. The same is happening in Bulgaria, as the CD apparently also contained data of Bulgarian tax evaders.

It is possible that everything is a well planned marketing campaign that is working well for the German and Bulgarian States.

Another interesting development is that banks might no longer accept undeclared funds. This is part of an ongoing debate and we will keep you informed.

Once again, it is important that you make use of tax compliant solutions - such as our SwissChoices Life Wrapper that has been approved by SARS and which should be part of every offshore portfolio.

bank robbery.jpg

Investment outlook

If you follow the worldwide markets we can recommend a regular publication by SAMI AG, Zug. You can download their market comment and recommendations by clicking here.

SwissChoices: SARS ruling further explained

Following the advanced tax ruling (ATR) on the above structure, some investors asked whether this can be considered a product ruling.

Please take note that SARS does not do any product rulings. An ATR can only be done for an individual application. However, the only underlying assumption in our application was that the applicant is a South African tax resident. No further conditions applied and therefore the ruling would be applicable to anybody who is liable for taxes in South Africa.

For more information please contact Mr. Hug on 021-5513331 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

2. Taxes

Budget Speech Highlights

Our new Finance Minister, Mr. Pravin Gordhan, presented his first Budget Speech on 22nd February 2010. The most important points are as follows:

New tax tables for individuals for the 2011 tax year:

Income

From

To

Taxes

Rates of tax

R 0

R 140´000

R 0

18% of each Rand

R 140´001

R 221´000

R 25´200

+ 25% over R 140´000

R 221´001

R 305´000

R 45´450

+ 30% over R 221´000

R 305´001

R 431´000

R 70´650

+ 35% over R 305´000

R 431´001

R 552´000

R 114´750

+ 38% over R 431´000

R 552´001

+

R 160´730

+ 40% over R 552´0
  • Tax rebates:
    R 10260; over age 65 R 15935 applies.
  • Tax thresholds:
    Persons under 65 years of age, earning less than R 57'000 and persons over 65 earning less than R 88'528 do not pay taxes.
  • Interest income exemption:
    R 22'300 (under age 65) and R 32'000 (over age 65).
  • Foreign interest / dividends:
    The tax-free exemption on foreign interest and dividends is R 3700.
  • Estate duty:
    There has been no change but the government is considering abolishing the tax as they have realised that the revenue is little combined with high administration costs.
  • Medical scheme contributions:
    The tax deduction will rise from R 625 to R 670 for the first two family members, and from R 380 to R 410 for each additional beneficiary as from 1st March.
  • Voluntary disclosure program:
    The introduction starts in November 2010 and will exist for 12 months. Non-compliant taxpayers may during this period to disclose and pay undeclared tax liabilities at a reduced interest charge and without penalties. Consideration will also be given to align exchange control violation penalties with this program.
  • Travel allowance:
    80% (previously 60%) needs to be taxed at source and your employer needs to deduct such fringe benefit tax. You need to keep a logbook to record all your travel and claim the business travel back. You can download a book on www.sars.gov.za.
  • Retirement annuity contributions:
    If your employer pays the premiums on your behalf, the amount paid will qualify as a tax deduction for you, subject to your allowable deduction. Your employer can now take these amounts into consideration to calculate your tax liability. This means you do not have to wait until your tax return is assessed to benefit from the tax deduction.
  • "Green tax" on new cars:
    An additional tax will be levied on new cars depending on the carbon emission. R 75 per gram of carbon dioxide emitted per kilometre above 120g/km will be charged. The tax will add approx. 2% to cars priced between R 150'000 to R 250'000.
  • Foreign Exchange:
    No changes yet, but will be communicated at a later stage.

  • Other Taxes:
    The yearly boring increase in excise duty has been introduced again: Beer 6.0c per 340ml can, Wine 31c per 750ml bottle, Spirits R 6.90 per 750 ml bottle and cigarettes 1.24c per packet of 20.

    The General Fuel Levy is increased by 25 cents as from 7th April. The Road Accident Fund (RAF) will thereof receive 8 cents to 72 cents per litre in total contribution.

Comment:

Taking inflation into consideration, the Minister did not give any tax relief to tax payers.

The voluntary disclosure program must not be confused with a tax amnesty, as outstanding tax is still payable with reduced interest.

It is, again, disappointing that the abolishment of Exchange Control Regulations is further prolonged. This year's budget will certainly not go down in history a memorable event from a tax perspective.

SwissChoices not under SARS spotlight

The question was raised after the release of the new budget, whether the taxation of captive insurance companies affects the SwissChoices portfolio. The answer is no - foreign insurers are untaxed and only local insurance companies bypassing the income tax act with offshore captive branches will be taxed now.

3. Short-Term Insurance

M&F shares delisted

The competition board has approved the purchase of the remaining shares by Old Mutual. The M&F stocks are therefore no longer listed on the JSE as they are no longer publicly held.

Use drive-in centres with motor claims

Most drive-in centres have improved their service handling and we recommend that clients take their driveable vehicles to such centres. You will get the authorization for repairs and you can select the most convenient panel beater at the centre.

Are you renting out your home during the World Cup?

Are you considering letting your house, apartment or rooms to visitors during the World Cup? Please note that your domestic insurance policy has got restrictions when you start renting out your home to strangers. You may no longer be covered against theft, malicious damage and your public liability may no longer be adequate.

Also, transporting of guests is not covered under your private motor insurance contract.

Please contact our office to discuss alternatives for your policy.

Is a leaking geyser an insurance claim?

It unfortunately happens over and over again: Your geyser (which is most of the times placed in the roof) leaks and damages ceilings, walls, carpets and furniture. Please note the following with regards to such damages:

  • The geyser itself is part of the building and needs to be claimed under that section of your policy. If you live in an apartment your body corporate policy covers such damage.
  • The geyser itself is not always covered. The thermostat and leaking is not insured and only an "explosion" might give you a replacement of the geyser, sometimes at a reduced value depending on the age of the geyser.
  • Ceiling, walls and fitted carpets are part of your building insurance section.
  • Your furniture and personal effects can be claimed for under your contents section.

In general, the geyser itself is not always covered. The resultant damage can normally be claimed for. Every insurance company has got their own rules. Please contact our short-term department for more information.

Santam policy and claim changes

The insurer is on a drive to make things more efficient for policyholders. Policyholders will receive the following offers:

  • Clients with no or little claims will be sent an excess voucher of R 1500. The voucher can be used with a contents or motor vehicle claim and is valid until January 2011.
  • You can increase your contents by approx. 30% without paying any premium if you had no recent claims. Santam wants clients to be properly insured. Should a claim occur until January 2011, no underinsurance clause is applicable.
  • Santam will facilitate to replace burst geysers with conversion to solar water heaters. The insurer has entered into a partnership with Eskom which has a rebate program in place. Please enquire about the possibility should you have to replace a burst geyser.

Eskom’s electricity supply insufficient – have you got power surge protectors?

You may have read a recent article in the daily press that there might be an unplanned shut-down of one of the reactors, leading to an undersupply of electricity in the near future.

We would like to remind you that you must have a power surge protection in your house. If you have not installed such a device, your insurance policy is not going to cover any damages to electronic equipment or other items.

For more information, please contact our short-term insurance department.

4. Health Care Cover

Bupa online claims now possible

We would like to urge all Bupa clients to register with the insurer on the secure website MembersWorld. Go to www.bupainternational.com/membersworld and register.

Registration is simple - all you have to do is fill in your personal details, profile details, a security question & insert a password.

You can manage your membership details and save time and hassle. You will no longer have to print and post off claim forms as you can do them online. You can update your details, look at your policies, track the claims and make payments online.

Bupa pricing and benefit changes

The following has been improved on the Worldwide Medical Insurance benefit:

  • Non-medically necessary caesarean is now covered under normal Childbirth and treatment in hospital limit
  • New medically essential caesarean benefit up to £13,000/$25,000/€18,750
  • New childbirth at home benefit up to £650/$1,105/€810

The insurer has adjusted the premiums and the overall increase is 7.6% on all modules. Members over the age of 65 will receive a further increase of 5%.

5. Immigration

Director General of the Department of Home Affairs resigns

Mavuso Msimang will vacate his seat as director-general of the Department of Home Affairs (DHA) in April. Questions remain whether the ambitious turnaround strategy he oversaw proved effective.

DHA spokesperson Cleo Mosana confirms that Msimang's contract is set to expire soon and that Msimang has indicated that he will not renew his contract with the department, which ends in April 2010.

Msimang's tenure was marked by the controversial multibillion-rand "Who Am I online" project, which was delayed several times and subjected to a forensic audit.

Two years after the implementation of the ambitious turnaround strategy, newly appointed Home Affairs minister Nkosazana Dlamini-Zuma criticised the levels of corruption in the department and the slow pace of transformation.

Dlamini-Zuma also noted that the department was still faced with poor infrastructure, corruption by officials in conjunction with syndicates, poor service delivery, low skills levels and technology challenges.

Mosana says the department is currently dealing with the recruitment processes and the vacancy will be filled as soon as a suitable candidate is available.

6. Other

New name and logo: SwissFin

You have seen it at the top of this newsletter, on our e-mails or maybe on our website. We are very happy with the new design and hope that you like it too.

Our trading name will change to SwissFin, but Swiss Financial Consulting will remain the registered name of the company.

We are looking for an additional staff member

Our short-term department is recruiting a preferably German speaking candidate that would like to be trained to become a short-term insurance claims consultant.

The position offers independent working with high responsibilities, interesting and challenging tasks. You will be part of a young, dynamic team that services clients in a positive working environment.

Applicants with a neat appearance, good communication skills should please send their CV to Mr. Hug at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
 

Contact Our Team


 Phone: +27 (0)21 551 3331
Fax: +27 (0)21 551 8061
Email: info@swissfin.co.za

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