Proceeds from Pension- / Provident- / and Retirement Annuity funds are all taxed differently.

Retirement payouts are usually structured in such a way that one third of the amount saved is paid out as a once-off lump sum payment, with the remaining two thirds of your savings being spread over the duration of your lifetime.

Taxation effect

Tax is payable on the lump sum received and if your pension income, (the capital portion excluded), is more than the tax threshold for the year of assessment, you will be taxed at the normal Tax scales.

Tax on the lump sum received from retirement, death or termination of employment has been simplified by SARS and they now make use of a bracket approach.

We can assist you in calculating the effect of your retirement benefits.

SOURCES :

Cronje & Cronje
Business Partners