Advice and Opinion

Reduce tax liability whilst investing in S12J funds


For the first time, South Africans are now able to invest in high quality hospitality and student accommodation businesses, whilst reducing their tax liability in the process. 

Westbrooke Alternative Asset Management looks after capital invested in S12J funds in South Africa, offering further opportunities to stimulate private investment in the economy and reducing investment tax liability.

If you subscribe for shares in one or a combination of our funds, you will be able to deduct your full investment against your taxable income and thus reduce the amount of tax payable at the end of February 2018” says Jonti Osher, fund manager at Westbrooke.

SARS introduced S12J, an investment tax incentive, in order to boost the economy by encouraging investment into private companies of a specific size and whom operate in select industries. The incentive provides individuals, companies and trusts with the ability to write off 100% of the investment against their taxable income within the year that they invest whereby investors can benefit from up to 45% immediate tax relief which reduces the cost of the investment. This provides downside protection and enhances overall returns. However, the investment must be held for at least five years.

The S12J deduction is available against all forms of taxable income before the close of the February tax year.

Student accommodation

Westbrooke Stac (Student Accommodation) invests alongside experienced, reputable operators which own and manage student accommodation operations situated in strategically located hot spots across South Africa including Pretoria, Johannesburg, Cape Town and Stellenbosch. The investment aims to provide an attractive dividend stream as well as capital growth in the underlying property assets on exit. Stac aims to assist government in promoting education by addressing the country’s bed shortage in key student hubs.

Cape Town decentralized hotel offering

Westbrooke Alto (Alternative Tourism) is a fully tax deductible investment into a portfolio of decentralized, residential hotel properties situated in attractive suburbs across Cape Town. Guests will book these hotel properties through the use of online reservation systems such as Airbnb,, Tripadvisor etc. The investment aims to capture the capital growth of the hospitality property over the investment period, whilst promoting local tourism.

Rental income

In addition to the launch of the new Stac and Alto funds, Westbrooke has reopened the Westbrooke Aria (Alternative Rental Income Assets) offering, which invests in a portfolio of asset-backed rental businesses with contractual revenue streams boasting a diverse base of South African business customers. The underlying investee companies focus on providing different types of moveable assets, such as vehicles and equipment, on medium and long term operating rentals to these customers. For example, Westbrooke provides growth capital to a company that rents, services and maintains scooters used by Famous Brand franchisees.

“Our previous investors have been successful in obtaining their tax relief and the process has been seamless through the use of the SARS e-filing system. We are focused on protecting our clients’ money by investing in asset-backed investments which also fulfil the mandate to stimulate investment into the SA economy. Westbrooke focuses on risk mitigation and capital preservation through asset-backed S12J investment strategies that aim to deliver attractive risk-adjusted returns” says Dino Zuccollo, fund manager at Westbrooke.

The minimum investment in these S12J funds is R500 000 and the offers close on 23 February 2018.