Just an example of a proposal I did for a client. Didn't have much information about the client, so used a lot of assumptions.

1. Investment Proposal
for Mr Client
By Marc Barnes

2. Contents
• Assumptions
• Tax Considerations
• Tax Thresholds & Exemptions
• Donations Tax
• Proposed Investment Products
• Product Allocations
• Product Descriptions
• Features & Benefits

3. Assumptions
• Capital Available  R 33,000,000
• Time-Frame  Basically open-ended, willing to use 5 years for a
portion
• Your marginal tax rate  40%
• Your spouse’s tax rate  Lower than yours
• Liquidity requirements  Reasonable liquidity on at least a portion of the
investment
• Income requirements
 No income required at present
• Guarantees required  Not known, assuming some guarantees
• Risk Profile  Moderate
• Existing Portfolio  Assumed possible equity / property portfolio

4. Tax Considerations
The effects of tax can seriously reduce the “real” returns of investments, so the
following proposals are designed to minimise these effects by splitting the tax
liabilities between yourself and your wife, hence the multiple-product style
recommendation. If this is not required, the number could obviously be reduced.
Taxes that may be levied include:
i. Income Tax
ii. Capital Gains Tax
iii. The newly-introduced dividend tax
iv. Donations Tax
v. Estate Duty
Rates of tax vary. An individual’s income tax could be as high as 40%. CGT is linked
to an individual’s marginal tax rate. The inclusion rate was raised last year to 33.3%
of the gain, meaning that the maximum CGT rate for an individual (at 40%) is
13.3%. Dividends tax is currently 15%. Donations tax and Estate Duty are both 20%.

5. Tax Thresholds & Exemptions
Each person may earn a certain amount before they become liable for tax therefore
we need to utilise these thresholds. Each individual may earn a certain amount of
interest that is exempt from income tax, so again we need to maximise these
exemptions.
Thresholds for persons under 65  R 63,556 per annum
Thresholds for persons 65 and older  R 99,056 per annum
Thresholds for persons 75 and over  R 110,889 per annum
Income exemption for persons under 65  R 22,800 per annum
Income exemption for persons 65 and older  R 33,000 per annum
Donations Tax
Each individual may donate a maximum of R 100,000 per annum that is exempt from
donations tax, so a husband and wife may together donate R 200,000 per annum. You
need to utilise this exemption to gradually reduce your liability for estate duty at a later
stage – you can reduce your estate duty liability by R 1,000,000 every 5 years.

6. Proposed Investment Products
• Fairbairn Capital Investment Plan
• Fairbairn Capital Life-Wrapped Investment Plan
• Sanlam Cumulus Plan
• Nedgroup Investments Unit Trust Portfolio

7. Product Allocations
R 10,000,000
•R 5,000,000
•Fairbairn Capital Investment Plan for Mr Client Standard Investment Plans that offer market
•R 5,000,000
growth and liquidity.
•Fairbairn Capital Investment Plan for Mrs Client
R 12,000,000
•Fairbairn Capital Life Wrapped Investment Plan for Mr Client 5 Year Endowments that will mature free from
•R 4,000,000
•Fairbairn Capital Life Wrapped Investment Plan for Mr Client
Income Tax and Capital Gains Tax.
•R 4,000,000 The Investor may have two withdrawals from each
•Fairbairn Capital Life Wrapped Investment Plan for Mr Client life wrapper (i.e. 6 in total).
•R 4,000,000
R 5,000,000
•Sanlam Cumulus Endowment for Mr Client Endowment that offers 80% Guarantee on
•R5,000,000
Escalating Funds.
R 3,000,000
•Nedgroup Investments Money Market Fund for Mr Client
•R 1,500,000
Completely liquid investment with capital security.
•Nedgroup Investments Money Market Fund for Mrs Client
•R 1,500,000
R 3,000,000
•Nedgroup Investments Unit Trust Portfolio for Mr Client
•R 1,500,000 These investments are also liquid but will benefit
•Nedgroup Investments Unit Trust Portfolio for Mrs Client
from market growth.
•R 1,500,000

8. FAIRBAIRN CAPITAL INVESTMENT PLAN
The Fairbairn Capital Investment Plan aims to provide the discerning investor
with optimum capital growth on after-tax investable capital via a lump sum
and/or scheduled investment basis.
Features & Benefits
• Wide Choice of Asset Managers. • Cession – Ownership of the investment
may be transferred to another legal
entity or ceded as security.
• Wide Range of Elite Funds which offer
investors Fee savings and size &
• Estate Planning – Upon death of the
duration bonus. investor, the investment forms part of
the estate.
• Liquidity – You may transact on this
investment at anytime. • Switching and Disinvestments may
incur a Capital Gains Tax liability (*).
• Switching Flexibility – Investors may
switch between unit trust funds at any • There is no Contractual Term and
time (*). therefore is open-ended. There are no
early withdrawal penalties.

9. FAIRBAIRN CAPITAL LIFE-WRAPPED INVESTMENT PLAN
The Fairbairn Capital Life Wrapped Investment Plan is a potentially tax-
efficient, flexible investment vehicle suitable for the purpose of growing after-
tax investment capital via a lump sum and/or scheduled investment basis.
Features & Benefits
• Wide Choice of Asset Managers. • Income Tax Efficiency – All interest & Dividends
earned are taxed in the hands of the Life
• Wide Range of Elite Funds which offer investors Fee Company.
savings and size & duration bonus.
• Investors do not have to declare their investment
• Additional Investments – Can be made during each returns (both income and capital gains) from the
contract year to a maximum of 120% of the highest policy in their personal tax returns.
investments made during the previous two contract
years. • Estate Planning – The Investor may nominate
beneficiaries for ownership of the investment.
• Liquidity – Two withdrawals (one loan and one
disinvestment) are allowed during the first five years, • Switching may incur a Capital Gains Tax liability (*).
thereafter multiple loans and withdrawals are
permitted. • This is a 5-Year Endowment type policy and will
mature free from Income Tax & Capital Gains Tax.
• Zero-Interest Loan - The investor is entitled to one
non-interest bearing loan during the first five years of
the Investment Contract. This loan attracts no
interest.

10. SANLAM CUMULUS ENDOWMENT PLAN
The Sanlam Cumulus Endowment Plan is a 5 year plan that offers a bonus
allocation amount of at least 5%. The investment is split into two different fund
categories. Mainly,
Features & Benefits – Features & Benefits –
Non-Escalating Funds Escalating Funds
• Consists of • Consists of
o Standard Unit Trust Funds o Unit Trust funds and part cash
o Built-in unit price guarantee
o Unit price will never be lower than
80% of the highest unit price it has
ever reached.
• Income Tax Efficiency – All interest & Dividends • Estate Planning – The Investor may nominate
earned are taxed in the hands of the Life Company. beneficiaries for ownership of the investment.
• Investors do not have to declare their investment • Switching may incur a Capital Gains Tax liability (*).
returns (both income and capital gains) from the
policy in their personal tax returns. • This is a 5-Year Endowment type policy and will
mature free from Income Tax & Capital Gains Tax.

11. NEDGROUP INVESTMENTS UNIT TRUST PORTFOLIO
Nedgroup Investments is a direct Unit Trust Investment House. This platform
offers a range of South African and offshore unit trust portfolios.
Features & Benefits – Money Features & Benefits – Equity Funds
Market Fund
• A very competitive money market rate to • Market-linked growth potential.
other companies.
• Liquidity – You may transact on this
• As the Unit Price of this fund does not investment at anytime. There are no early
change (100 cents per unit), the funds
are available if needed, within 24 hours withdrawal penalties.
upon instruction.
• Estate Planning – Upon death of the
• Flexibility – Additions, Switches & investor, the investment forms part of the
Disinvestments can be done at any time. estate.
Distributions may be reinvested or paid
out to the Investors bank account.
• Switching and Disinvestments may incur a
• Cession – The Investor may use this Capital Gains Tax liability (*).
investment for a security cession or can
transfer his / her investment to another • There is no Contractual Term and
legal entity. therefore is open-ended.

12. Thank you for the opportunity