Q: Please can you let me know if the balance of non-retirement
funding income is carried forward from one year to the next.
A: Non-retirement funding employment income is the
amount of "remuneration” per the Fourth Schedule of the Income Tax Act (ITA)
that is not "retirement funding employment income” as defined in section 1 of
the ITA. It is merely used to determine the income tax deduction in section
11(k) & (n) of the ITA for pension and RAF contributions.
As the deduction is based per year on the retirement
remuneration earned in that year, there is no balance that rolls forward. For example
if the taxpayer had non-retirement employment income in year 1 & 2 of R100
but only contributed to a RAF in year, his deduction would be based only on the
R100 in year 2 and not on R200.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
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