Friday, October 11, 2024

Turn Your Tax into Solar Power

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Please note that this article has been paid for by Futureneers. The Finance Ghost does not have any involvement in this business. As with every investment opportunity in the market, you must always do your own research fully and you must refer to the Futureneers website for all details.

Seizing the Section 12BA Opportunity

In the world of investing, it’s not just about where you put your money, but how you leverage every opportunity. There’s a saying that’s been making the rounds on Twitter/X: “Regular people invest their own money. The wealthy invest via their own balance sheet.” As we cruise through February, this rings especially true for South African taxpayers facing their 2024 tax liabilities.

Welcome to the World of Section 12BA

Here’s a thought: What if your tax liability isn’t just a drain on your personal balance sheet but a gateway to profitable investment? Enter Section 12BA, a golden opportunity for South African taxpayers to turn their tax payments into gains by investing in solar energy.

Once-in-a-Lifetime Opportunity – Don’t Miss Out

This isn’t just another investment scheme. For the tax years 2024 and 2025 only, SARS is rolling out the red carpet for those who invest in solar energy. It’s a response to our nagging load shedding woes and a chance for you to get in on the ground floor of something big while doing your bit for the country.

South Africa is a “tax haven” if you invest in solar for the next two years.

So, How Does This Solar Dance Work?

Let’s break it down:

  • Your Move: Put R1,000,000 into our solar fund, we add a R520,000 loan to the mix, and we’re talking about a R1.52 million investment in solar assets.
  • The Tax Tango: With Section 12BA, that R1.52 million gets you a tax deduction of 125% – that’s R1.9 million off your taxable income. It could be a saving (provisional tax), or, it could be a refund (PAYE) of up to R855,000.
  • Minimizing Risk: This move smartly offsets most of your initial investment, leaving just R145,000 of your (after-tax) money really on the line.
  • Profit Time: We project generating R4,100,000 million from the solar assets by selling electricity (after all operating expenses and fees). After repaying loans and interest, the net cash distribution to you, will be around R3,000,000 over the duration of this investment, on which you will pay R1,600,000 in income tax on your profits. This leaves you with R1,400,000 in cash, and a tax saving of R855,000 with a total return of R2,225,000.

Tick Tock, The Clock’s Running

Just a heads up, though – to get this show on the road for the 2024 tax year, your solar assets need to be live and generating kilowatts by 29 February 2024. No pressure, right?

Why Futureneers Stands Out

Unlike other funds that raise capital first and rush to deploy it, Futureneers took a different approach. We developed the solar assets first, ensuring absolute certainty of their operational status by February, and now we’re raising our last batch of capital. Because of this deadline, and the operational assets in our portfolio, we work on a first come first serve basis. So, you can’t wait until the last week in February to make your investment (we only have R18 million left until the fund is fully allocated).

The Million-”Randela” Question

So, here’s what it boils down to: Would you rather just pay your taxes, throwing good money into the Government pot, or would you prefer to invest that money in private sector solar assets, earn some solid returns, and help SA get a grip on the energy crisis?

Visit the Futureneers website to get a personalised overview for a Section 12BA tax structured investment and reserve one of the limited tax deduction spots before 19 February 2024.

*Please note that all calculations and figures are based on a 45% tax rate.

1 COMMENT

  1. Why don’t Eskom invest in this? Ok, they don’t need the tax deduction, but surely can do with the profit from selling the electricity.

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