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Endowment
Wrapper

A structured investment wrapped in insurance policies taxed at 30%.

These are structured investments wrapped in insurance policies with attractive tax and estate planning benefits for individual’s in high income tax brackets.

The many advantages of an endowment wrapper include:

  • The income tax rate is fixed at 30%. Meaning, for individuals above the 30% tax rate, you save on taxes. That also means that CGT for individuals is effectively 12% (30% x 40% inclusion rate) where it would usually be 18% if you are in the highest tax bracket of 45%.
  • Taxes are also handled on your behalf by the administrative company, meaning they pay SARS for you, so you don’t have to worry about cashflow to pay additional taxes.
  • Your nominated beneficiaries can receive your investment immediately either via the proceeds or they can continue with the product themselves. And there are no executor’s fees.
  • Can be opened in the capacity of individual investors, trusts, companies, close corporations and nontaxable entities.
  • Can be invest in unit trust funds and/or a concentrated bespoke share portfolio managed by us
  • No offshore Will required for offshore investments housed within the wrapper

Limitations of an endowment wrapper include:

  • During the first five years of your investment, known as the restriction period, you may only make one withdrawal. However, when you are not in a restriction period, you may withdraw from your investment at any time, or schedule regular withdrawals.
  • Your five-year restriction period may be extended if in one year, if you invest more than 120% of your investments over either of the past two years.

If you have a high time horizon and find yourself in a high tax bracket this may be suitable for you.