Money Matters
Issue 40

July/August 2021

When preparing this Newsletter in June, things were looking pretty upbeat. As Pieter Koekemoer of Coronation Asset Management put it, the global economy is booming as lockdowns began to ease. South Africa recorded its best terms of trade since the 1980’s, fuelled by the commodities boom. The pace of the vaccination rollout continued to increase. The unexpected accommodative deregulation of independent power generation laid the groundwork for greater efficiency in the management of our ports. There were also decisive steps in the fight against corruption.

Although the recent unrest in KwaZulu-Natal and parts of Gauteng has disrupted some of these gains, in the short term markets have interpreted this as a one-off event that will quickly be brought (and kept) under control. It seems that global risk appetite played a much larger role in setting market prices than local events did, however traumatic they were to live through.

Many are still feeling bruised from the recent anarchy and it may well take the arrest of the instigators to properly come to terms with it. We thought it helpful to lead this edition with a follow on article by JP Landman titled, ‘The Centre is Holding’ where he deconstructs the ‘week of chaos’ and gives his opinion as to ‘where to from here’. His previous article, in hindsight, seemed prematurely optimistic and many of our clients have been eagerly awaiting his follow up article.

We have also included an article that affects many South Africans who own assets abroad, some of whom are blissfully unaware of the fact that they may be hit with further inheritance tax, over and above South African Estate Duty. Some may be paying as much as 160% additional tax. The article will enable you to plan accordingly.

We at Stone Wealth Management recognize that life is a journey and that financial security is important on that journey. Our aim is always to keep our clients informed and well equipped to deal with uncertainty.

Linda Stonier – CEO Stone Wealth Management

• Twenty-one days ago, the Constitutional Court sentenced former president Jacob Zuma to 15 months in jail for contempt of court.
• Eleven days ago, he surrendered himself to the police. ‘The best of times’.
• Ten days ago, violence started in KZN with the burning of trucks. Calls were made for Zuma to be released/pardoned.  ‘The worst of times ‘.
• Nine days ago, the violence spread to Gauteng.  ‘The season of darkness ‘.
• Eight days ago, mass scale looting and plundering commenced in both KZN and Gauteng. ‘The worst of times’.
• Five days ago, both the violence and the looting peaked and started tapering. ‘The spring of hope’.
• Three days ago, the violence had abated, and a great spontaneous push back occurred. ‘The season of light’.

Death Taxes on Foreign Assets
Do you own shares, property or other assets situated in the UK, USA or any other jurisdiction? Many South Africans are blissfully unaware of the fact that they may be hit with an additional 160% inheritance tax, over and above the Estate Duty payable in South Africa. Careful planning can mitigate or eliminate this additional tax. It is therefore important that you choose to work with a Financial Adviser who has the necessary skillset to provide holistic advice on your investment portfolio, whilst being acutely mindful of international tax planning.