Bluecare Insurance Brokers

Corporate Retirement Benefits

 TAX RATES FOR BENEFITS ON PENSION AND PROVIDENT FUNDS FROM OKTOBER 2007 ON RETIREMENT

 
PROVIDENT FUND PENSION FUND RETIREMENT ANNUITY DEFERRED COMPENSATION
Cash Lump Sum Cash Lump Sum Cash Lump Sum Cash Lump Sum
RETIREMENT BENEFIT

Entire amount or cession value of policy

½ of total value (if annuity less than R1 800.00 full benefit). [Section 1 "pension Fund" (c) (ii) (dd).]

Balance comp annuity taxed i.t.o. tax tables

½ of total value (if annuity less than R1 800.00 full benefit).
[Section 1 "RA fund
" (b) (ii).] Balance comp. Annuity Taxed i.t.o. tax tables
Entire cash amount or special cession value.
Tax-free portion Tax-free portion Tax-free portion Tax-free portion

Z = C + E – D

WHERE:

Z = TAX FREE AMOUNT
C = AMOUNT TAXED AT



R 0 to R300 000/ 0% Tax
R300 001 to R600 000/ 18% Tax
R600 001 to R900 000/ 27% Tax
R900 001 plus / 36% Tax

E = PREVIOUSLY DISALLOWED OWN CONTRIBUTIONS
D = TOTAL TAX FREE FROM OTHER APPROVED FUNDS
[2nd Schedule]

Z = C + E – D

WHERE: Z = TAX FREE AMOUNT
C = AMOUNT TAXED AT



R 0 to R300 000/ 0% Tax
R300 001 to R600 000/ 18% Tax
R600 001 to R900 000/ 27% Tax
R900 001 plus / 36% Tax

E = PREVIOUSLY DISALLOWED OWN CONTRIBUTIONS
D = TOTAL TAX FREE FROM OTHER APPROVED FUNDS
[2nd Schedule]

Z = C + E – D

WHERE:

Z = TAX FREE AMOUNT
C = AMOUNT TAXED AT:



R 0 to R300 000/ 0% Tax
R300 001 to R600 000/ 18% Tax
R600 001 to R900 000/ 27% Tax
R900 001 plus / 36% Tax

E = PREVIOUSLY DISALLOWED OWN CONTRIBUTIONS
D = TOTAL TAX FREE FROM OTHER APPROVED FUNDS
[2nd Schedule]

R30 000 less tax free lump sums previously received. Provided that :
  • recipient at least 55 ; or
  • termination due to superannuation, ill health or other infirmity; or
  • termination due to employer ceasing business or redundancy as a result of employer’s general reduction in personnel and, in the case of a company, the employee was not a director and shareholder with more than 5 % of share capital

[Section 10 (1) (x)]