What if part of the tax you already owe SARS could become an income-producing solar investment instead?
That is the question at the heart of the first episode of The Prestige Play, Decentral Energy's new podcast on investment and tax efficiency. Host Lerato sits down with Murray Kuiper, Decentral's CFO, to walk through Section 12B in plain language: how the deduction works, how the fund is structured, and who it is designed for.
Section 12B allows a 100% deduction in the first year for qualifying renewable energy assets of 1MW or less. Assets over 1MW spread the deduction over three years, at 50%, 30% and 20%.
Decentral Green Energy Fund 4 is structured as an en commandite partnership, which gives investors a look-through to the solar assets themselves. Each asset is funded with roughly 45% investor equity and 55% senior debt.
Murray uses a simple illustration in the episode. An investor with R3 million of taxable income invests R450,000. Combined with debt, that funds R1 million of solar assets, and the investor's taxable income drops to R2 million for the year.
Section 12B is built for investors paying tax at the top 45% marginal rate. That includes provisional taxpayers, salaried individuals on PAYE who can claim the deduction back, and discretionary trusts. The minimum investment is R500,000.
Decentral has raised three Section 12B funds to date, and Fund 4 is raising now. Its assets span shopping centres, agriculture, commercial sites and residential estates.
Murray covers the full fund terms in the episode.
Fund 4 has a hard close on 28 February 2027. Investors can secure an allocation early by signing a deed of adherence, either directly or through their wealth manager or tax practitioner.
To find out whether Section 12B is right for you, contact Les at les@decentral.co.za or Lerato at lerato@decentral.co.za. For general enquiries, email invest@decentral.co.za.
Investments carry risk. Section 12B eligibility, and the availability and extent of any tax deduction, depend on applicable legislation, asset structure and individual investor circumstances. Investors should obtain independent tax, legal and financial advice before investing. This communication is not tax or investment advice.
