Section 12J Exit
Income Opportunity
Introduction
This opportunity is tailored for exiting Section 12J investors as it provides access to a dual-mandate investment that offers both a tax shield and an annual income yield.
Investors will benefit from a tax deduction of up to 166% in the current financial year, which offers a strategy to mitigate the 18% Section 12J exit tax – completely or in part – while targeting an average annual income of 8.5% (post-tax and net of fees).
A key feature is that investors gain exposure to two mandates, both offering meaningful diversification and annual income.
Dual Mandate Investment Strategy
To maximise tax efficiency, Jaltech’s Section 12J Income Opportunity will split investors’ capital into two mandates:
- 76% will be allocated to the Jaltech Income Opportunities Fund (“Jaltech IOF”), which provides investors with access to the South African private debt market and targets returns of approximately 12% to 14% per year (post-tax and net of fees) over the term of the investment.
- 24% will be allocated to Jaltech’s Section 12B Investment VII, which offers investors exposure to returns generated from the commercial and residential solar market, with the added benefit of a tax deduction of up to 166%.
Investment Highlights
Limited capital raise: R100 million
Diversified income, risk and exposure
Up to 166% tax deduction
High deployment capabilities
Annual Average Yield (post-tax & net of fees): 8.5%
Short Explanatory Video
For a brief overview of Jaltech’s Section 12J Exit Opportunity, watch the video below where Jonty Sacks explains the investment during a recent webinar.
Brochure
Dual Mandate Post Tax Cash Flows
This strategy is designed to deliver an upfront tax benefit, followed by consistent annual income over the investment term.
Below are the projected cumulative returns (post-tax & net of fees) demonstrated as a percentage of an investment of R1 million.
+ Assumptions
- The investor is in the highest tax bracket
- The Prime Rate as of April remains unchanged
- Jaltech IOF’s portfolio is sold at year 5 and the solar assets are sold at year 8
- 166% tax deduction
Investment Forecast Summary
| Pre-tax return (incl. tax benefit & net of fees) | R1 932 594 |
| Post-tax return (incl. tax benefit & net of fees) | R1 643 571 |
| Pre-tax IRR (incl. tax benefit & net of fees) | 17% |
| Post-tax IRR (incl. tax benefit & net of fees) | 12% |
| Average annual post-tax yield (excl. tax benefit & net of fees) | 8.5% |
| Pre-tax return (incl. tax benefit & net of fees) | R1 932 594 |
| Post-tax return (incl. tax benefit & net of fees) | R1 643 571 |
| Pre-tax IRR (incl. tax benefit & net of fees) | 17% |
| Post-tax IRR (incl. tax benefit & net of fees) | 12% |
| Average annual post-tax yield (excl. tax benefit & net of fees) | 8.5% |
How to invest?
By simply completing the investment form, Jaltech’s dedicated team will take you through the investment process.
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Disclaimer: The contents of this document do not constitute and should not be construed as an offer to subscribe for shares or investment, tax, legal, accounting and/or other advice. For advice on these matters, consult your preferred investment, tax, legal, accounting and/or other advisers about any information contained in this document. All returns mentioned in this document are estimates at current tax rates, and past performance is not an indication of future performance. All returns and references to investor(s) are with reference to an investor(s) who is in the highest tax bracket.
All reference to investor(s) assumes the investor(s) are natural persons with an income tax rate of 45%.