The 2026 South African Budget introduces meaningful tax relief for investors at a time when efficiency matters more than ever. From 1 March 2026, individuals can save more through higher tax‑free and retirement contribution limits, benefit from expanded capital gains tax relief, and enjoy greater flexibility to diversify offshore. This article highlights the key changes and what they mean for your financial planning.
PERSONAL SAVINGS & RETIREMENT
National savings incentives: To encourage long‑term saving, several key limits have been increased.
Tax‑free investments (TFSA): The annual contribution limit increases from R36,000 to R46,000, while the lifetime limit remains unchanged at R500,000.
Retirement fund contributions: The maximum annual amount that may be claimed as a tax‑deductible retirement fund contribution increases from R350,000 to R430,000.
Annuitisation and commutation: The de minimis threshold below which retirement interests are not subject to compulsory annuitisation increases from R247,500 to R360,000, while the living annuity commutation limit increases from R125,000 to R150,000.
capital gains tax & property relief
Capital gains tax (CGT): Adjustments to CGT thresholds provide meaningful relief for homeowners and estates.
Primary residence exclusion: The exclusion on the gain or loss arising from the disposal of a primary residence increases from R2 million to R3 million.
Annual CGT exclusion: The annual exclusion for individuals and special trusts increases from R40,000 to R50,000.
Exclusion in the year of death: The CGT exclusion applicable in the year of death increases from R300,000 to R440,000, reducing the tax burden on deceased estates.
Small business assets: The CGT exclusion on the disposal of qualifying small business assets (for individuals aged 55 and older) increases from R1.8 million to R2.7 million.
Capital gains tax remains a critical component of effective estate and succession planning. Clients considering the disposal of property, business interests, or other capital assets should consult their wealth adviser to ensure transactions are structured tax‑efficiently.
INDIVIDUAL THRESHOLDS AND DONATIONS
Donations tax: The annual exemption for individuals increases from R100,000 to R150,000.
This means an individual can donate up to R150,000 per tax year, in total across all donations, without triggering donations tax. This is particularly useful for married couples, as each spouse has their own exemption, allowing a couple to donate up to R300,000 per tax year on a tax‑free basis, provided both spouses are tax residents.
offshore allowance
The Single Discretionary Allowance (SDA) for individuals increased from R1 million to R2 million per calendar year.