The answer to this query is based on legislation as at 2014/03/14.
Q: Currently we getting a tax deduction for Retirement Annuities.
How does the tax work, when the individual retires, and receives the RA out?
A: When you retire and you are member of a pension fund, pension
preservation fund or retirement annuity fund and you wish to take a portion of
your retirement interest as a lump sum, you are allowed to take a lump sum
(commute) up to a maximum of one-third of the retirement interest in that
fund, unless the entire value of the fund does not exceed R75 000 in which
case you take the full retirement interest as a lump sum. The tax free portion of the 1/3 portion should be calculated (2nd
Schedule to the Income Tax Act) and the following preferential tax rates will
apply on the taxable amount:
Retirement fund lump sum benefits or severance benefits (2014)
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.
MINIMUM REQUIREMENTS TO REGISTER
The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.