Financial Services

Angelo Graham Financial Services:

LinkedIn Page: Angelo Graham Financial Services:

About us :

Mission: To create financial freedom for my clients by providing professional advice. Vision: To build a financial services business focused on client and education.

Personalised focus for individuals, SME business clients or corporate entities:

  • Domestic insurance
  • Fiduciary services
  • Wealth management
  • Investment management
  • Personal financial planning

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Financial Services

Has your money seen a specialist lately?

As a financial planning professional,  I follow a few key individuals as their access to information and willingness to share improves my insight & knowledge:

These key individuals are willing to share not only insight, learning & experiences they have had but also take the time to ensure understanding of the world around us.

I would encourage each of us to continue learning and sharing in our respective fields and then to “Pay it Forward”.

Financial Services

This day in History:

On this day in History

  • 1661 The Treaty of The Hague is signed, whereby the Dutch Republic sells New Holland (Brazil) for 63 tonnes of gold to Portugal.
  • 1945 The atomic bomb is dropped on Hiroshima by the US B-29 Superfortress “Enola Gay”.
  • 1962 Jamaica becomes independent after 300 years of British rule.
  • 1991 Tim Berners-Lee releases files describing his idea for the World Wide Web. WWW debuts as a publicly available service on the Internet.

Culture Club

  • 1965 The Beatles release the album “Help” in the UK.
  • 1974 ABBA scored their first US top 10 hit when ‘Waterloo’ went to No.6. ‘Waterloo’ was written specifically to be entered into the 1974 Eurovision Song Contest.
  • 1996 George R.R. Martin publishes the epic fantasy novel “A Game of Thrones”, the first in his series “A Song of Ice and Fire”.
  • 2015 Comedian Jon Stewart hosts “The Daily Show” for the last time.
Financial Services

Business Assurance: Buy & Sell Agreements

Will your buy-and-sell contract stand up in court?

Many prudent business owners entered into contracts to regulate the situation where a co-owner dies or becomes disabled.

These contracts are commonly known as buy-and-sell contracts. A buy-and-sell contract stipulates that the surviving owner will buy the share of the deceased owner upon the death of the latter.

The purchase price, or a formula to calculate the purchase price, is included in the contract. Each party then insures the life of the other party for the purchase price.

The contract may also include a provision that a disabled business owner’s share must be bought by the other owner upon the disablement of one of them.

The Companies Act of 2008, which came into effect on 1 May 2011, brought about important legal changes with regard to the operation of buy-and-sell contracts.

Before the 2008 Companies Act, any contract between shareholders (including buy-and-sell contracts) could alter the founding document of the entity. Following the enactment of the Companies Act of 2008, the founding document is now called the Memorandum of Incorporation (previously referred to as the Memorandum and Articles of Association).

Section 15(7) of the Companies Act of 2008 changed this position. Any contract between shareholders must now align with the provisions of the Companies Act, as well as with the provisions contained in the Memorandum of Incorporation. If any subsequent contract (including a buy-and-sell contract) does not align with the provisions already incorporated in the Memorandum of Incorporation, the provisions of the subsequent contract are void. This means that many buy-and-sell contracts are void and unenforceable – which those prudent business owners who entered into the contracts are not aware of.

I would strongly recommend that every business owner who entered into a buy-and-sell agreement should seek the help of a qualified financial adviser to ensure that the buy-and-sell agreement and the Memorandum of Incorporation of the company are in alignment.

While doing so, it may also be worth your while to ensure that the sums assured of the policies taken out to fund the buy-and-sell contract are still reflecting the value of the business. If not, business owners may find themselves in the situation where one is obliged to buy a partner’s share of the business, but the amount of money the policy pays out is totally inadequate.

Article Written by Adv. Kobus Engelbrecht, Marketing Head: Sanlam Business Market.



Section 7C and its effect on Trusts:

From time to time, I will take the liberty to use this platform as an information sharing tool.

My commitment is share relevant information with aim of broadening insight and understanding of financial instruments & the impacts they may have.

The article below was published recently and is relevant in terms of the legislative changes in South Africa at the time.

Section 7C and its effect on Trusts: 23 July 2018  |  by Lighthouse

Effective 1 March 2017, section 7C put a stop to the well-used technique of shifting value to trusts using interest-free or low interest loan accounts, which pegged the value of the asset transferred, thus avoiding estate duty on future asset growth.

Section 7C deems interest to accumulate on the difference between the interest charged and the official rate (currently 7.5%) during the year of assessment, and treats this deemed amount as a donation back to the trust during each year of assessment. This effectively erodes the donations tax exemption available to natural persons (currently R100,000) and limits the extent to which a planner can reduce the loan he or she made to the trust by donating back to the trust each year an amount equal to the exempt amount.

It is important to note that s 7C only applies to resident natural persons if they are connected persons to the trust, or to a company that makes a loan to a trust if the loan is at the instance of such resident connected person.


Planner loans to his family trust the sum of R10,000,000 (TEN MILLON RAND) as part of an estate planning exercise to purchase a share portfolio. The loan is interest free and payable on demand. The resultant donations tax liability is illustrated below:

Step 1: Calculate the deemed interest: R10,000,000 x 7.5% (current official rate) = R750,000

Step 2: Deduct the annual donations tax allowance available to resident natural persons, currently R100,000: R750,000 – R100,000 = R650,000

Step 3: Calculate the donations tax payable: R650,000 x 20% (current rate of donations tax) = R130,000

The donations tax liability, payable at the end of the tax year and every subsequent year in which the interest rate on such loan remains 0% and the official rate remains 7.5%, will therefore be R130,000.

Section 7C does not apply in all circumstances

There are several instances where s 7C will not apply to interest free or low interest loans to trusts or companies (“affected entities”). These exemptions are summarised as follows:

1. Any loan to an affected entity which is an approved Public Benefit Organisation or Small Business Funding Entity;

2. Any loan to a trust by a person by reason of or in return for a vested interest held by that person in the receipts and accruals and assets of the trust;

3. Any loan to a trust which qualifies as a Special Trust;

4. Any loan to an affected entity where the loan, wholly or in part, was used to fund the acquisition of a primary residence as defined in the Act;

5. Any loan to an affected entity in terms of an arrangement that would have qualified as a Sharia compliant financing arrangement as defined; and

6. Any loan which is caught under the deemed dividend provisions or which qualifies as an affected transaction, i.e transfer pricing.

Further refinements to section 7C

As with most anti-avoidance measures, taxpayers try and restructure their affairs to avoid the effects of the new measures – in this respect, SARS identified two schemes employed and brought in new measures towards the end of 2017, effective 19 July 2017:

Loans made to companies

Prior to the amendment, s 7C only applied to loans made to trusts. This provision was overcome by restructuring the trust’s assets into a company whose shares were held by a trust and the planner extending a low interest or interest-free loan to the company. From the effective date, the provisions of s 7C now extend to loans made by individuals to companies in which the trust (or a beneficiary of the trust) holds at least 20% of the shares or 20% of the voting rights in the company.

Transfer of Loans

Section 7C only dealt with the initial lender, and it was argued that where the loan claim was transferred to another person, usually a beneficiary of the trust, then s 7C no longer applied. This argument has now been shut down by making it clear that the recipient of such claim will also be subject to the provisions of s 7C where they are a connected person in relation to the trust or company receiving the low interest or interest-free loan.

The reach of 7C is wide, and has put an end to the popular value-shifting arrangement so effectively employed using interest-free loan accounts. Structuring your estate utilising a trust still has many advantages, but it is crucial to obtain professional advice before proceeding.





What is compound interest? It is the money you earn by re-investing all the interest you earn. Compound interest is how the rich get richer.

Here’s an example of compound interest. You may have heard of this old chestnut: If someone were to offer you the choice between $1 million cash now, or a penny on day 1, with that figure doubled and compounded each day for 31 days, which should you take?

The correct answer is, you should take the latter because it will amount to $10,737,418.24. Sounds impossible, but the math works out:

Day 1: $0.01

Day 2: $0.01 x 2 = $0.02

Day 3: $0.02 x 2 = $0.04

Day 4: $0.04 x 2 = $0.08

Day 11: $10.24

Day 22: $20,971.52

Day 31: $10,737,418.24

Now it should be easy to understand why Albert Einstein supposedly said, “Compound interest is the greatest force in the universe.” Compounding interest is, after all, how the rich get richer.