The 2026 Budget.
What changed, what it means, and what to do next.
Tax limits
Updated thresholds and exclusions at a glance
01 — Tax-free savings
Annual limit:
R46,000
Per year into your tax-free investment.
Up from R36,000 — the first increase since 2021. Every rand of growth, income, and withdrawal remains completely tax-free.
↑ R10,000 more per year
Previous limit
R36,000
R3,000 / month
New limit
R46,000
R3,833 / month
02 — Retirement annuity
Deductible cap:
R430,000
In tax-deductible retirement contributions.
First increase since 2016. At the 45% marginal rate, the extra R80,000 headroom saves up to R36,000 in tax per year.
↑ R80,000 more deductible
Previous cap
R350,000
R29,167 / month
New cap
R430,000
R35,833 / month
03 — Capital gains tax
Key exclusions:
R50,000
Annual exclusion — first change since 2017.
CGT inclusion rates remain unchanged at 40% for individuals (effective max 18%). Thresholds have been materially improved across the board.
↑ R10,000 annual exclusion
Annual CGT exclusion
R40,000
R50,000
Exclusion on death
R300,000
R440,000
Primary residence
R2,000,000
R3m
Small biz disposal (55+)
R1,800,000
R2,7m
Single discretionary annual allowance
R1,000,000
R2m
04 — Business thresholds
VAT & turnover tax:
R2.3m
New threshold — more than doubled.
Both the compulsory VAT registration limit and micro business turnover tax threshold jump from R1 million to R2.3 million. VAT change effective 1 April 2026.
↑ 130% increase in threshold
VAT registration limit
R1,000,000
R2,3m
PIT bracket inflation adj.
None (2 years)
3.4% relief
Primary rebate
R17,235
R17,820
Medical tax credit (2 members)
R364/mo
R376/mo
Estate & legacy
What the ‘26 changes mean for your estate
01 — CGT at death
Death exclusion:
R440,000
In capital gain excluded at death.
Up from R300,000 — a R140,000 improvement. Combined with the primary residence exclusion rising to R3 million, estate CGT planning has materially improved.
↑ R140,000 more excluded
CGT exclusion on death
R300,000
R440,000
Primary residence exclusion
R2,000,000
R3m
Annual CGT exclusion
R40,000
R50,000
Estate duty — first R30m
Unchanged
20%
Estate duty — above R30m
Unchanged
25%
02 — Donations tax
Annual exemption:
R150,000
In gifts per year — tax-free.
First increase since 2007. The 19-year gap means this change is long overdue. Donations above this threshold attract 20% donations tax.
↑ From R100,000 (last set 2007)
Previous exemption
R100,000
Last adjusted in 2007
New exemption
R150,000
Effective 1 March 2026
2.3 — Emigration warning
Effective immediately:
Closed.
The spousal donation loophole is shut.
From 25 February 2026, the donations tax exemption between spouses only applies if the recipient spouse is a South African tax resident. The staggered emigration strategy no longer works.
! Effective 25 February 2026
Spousal transfer loophole closed
Previously, couples staggered residency cessation to transfer assets tax-free to a non-resident spouse — reducing both donations tax and exit tax.
Ring-fencing threshold lowered
Now applies from the 39% bracket (taxable income ~R695,800) — down from the 45% bracket (~R1.82m). Rental, crypto and collectible losses affected.
Living annuity de minimis clarified
The limit applies per insurer/fund — not per policy. Multiple policies with same insurer cannot be split to trigger multiple commutations.
04 — Business exit planning
Disposal exclusion (55+):
R2.7m
CGT excluded on qualifying business sale.
Business market value cap rises to R15 million to qualify. For owners aged 55+, this is the most tax-efficient exit structure for active small businesses.
↑ From R1.8m (up 50%)
Small biz CGT exclusion (55+)
R1,800,000
R2,7m
Business market value cap
R10,000,000
R15m
Donations exemption (individual)
R100,000
R150,000
Donations exemption (entity)
R10,000
R20,000
Ring-fencing threshold
45% bracket
39% bracket
Retirement
Contribution limits and tax relief for the year ahead
01 — Combined savings power
Combined annual tax incentive savings:
R476,000
In tax-advantaged savings — from 1 March 2026.
TFSA (R46,000) plus RA (R430,000) gives you the maximum sheltered savings since the two-pot system launched. At 45% marginal rate, this saves over R120,000 in tax.
↑ Up from R386,000
R476,000
Maximum annual tax-sheltered savings
TFSA
R46,000
R3,833 / month
Retirement annuity
R430,000
R35,833 / month
02 — Two-pot system
No change in 2026
⅓ · ⅔
Savings pot — retirement pot. Since Sept 2024.
The two-pot mechanics remain unchanged. One savings pot withdrawal per tax year (min R2,000, taxed at marginal rate). Retirement pot accessible only at retirement.
No changes announced
Savings pot
⅓ of new contributions
One withdrawal per tax year (minimum R2,000). Taxed at your marginal rate on withdrawal. Emergency access — use it sparingly.
Retirement pot
⅔ of new contributions
Locked until retirement. Annuity purchase required at retirement (unless total fund value is below R360,000). Preserves your long-term compounding.
Vested pot
Pre-September 2024
Retains pre-existing RA rules. Accessible under the legacy framework at retirement or termination.
03 — Annuity thresholds
Annuitisation de minimis:
R360,000
Below this, take 100% as a lump sum.
Members with total retirement interest below R360,000 no longer need to purchase an annuity — they can take a full lump sum. Living annuity commutation also raised to R150,000.
↑ From R247,500
Annuitisation de minimis
R247,500
R360,000
Living annuity commutation
R125,000
R150,000
RA deductible cap
R350,000
R430,000
TFSA annual limit
R36,000
R46,000
Combined annual tax incentive savings
R386,000
R476,000
Never worry about your retirement savings again.
Bring your scattered pensions together and experience what retirement planning should feel like.
