National Treasury’s recent announcement accompanying the draft Taxation Laws Amendment Bill, 2014 (the Bill) confirms the speculation around the postponement of the changes to the tax treatment of retirement savings. The changes were set to impact the tax treatment of contributions to retirement funds and require the annuitisation of provident fund pay-outs. The effective date, which would have been 1 March 2015, will now be delayed for one, or possibly, two years.
Category: Retirement
Finance Minister Nhlanhla Nene assures South Africans their pensions are safe
Finance Minister Nhlanhla Nene has called on South Africans to refrain from cashing in their provident fund savings when they resign or change jobs, adding that rumours that their retirement savings are under threat were “false”. The Minister was responding to rumours that have been doing the rounds in the public service circles that government was planning to nationalise employee pension funds.
Collective investment schemes
Section 25BA prior to 1 January 2014 Prior to the amendments contained in the Taxation Laws Amendment Act No. 31 of 2013 (the TLAA), a Collective Investment Scheme (CIS) was taxed on a semi-flow through regime in terms of section 25BA of the Income Tax Act No. 58 of 1962 (the Act).
2014 draft Taxation Laws Amendment Bill
By Webber Wentzel No surprises in the “first batch” 2014 draft Taxation Laws Amendment Bill What National Treasury have dubbed the “first batch” of the draft Taxation Laws Amendment Bill (TLAB) proposes two main sets of amendments, namely changes to the tax treatment of the risk businesses of long-term insurers, and clarification of the fringe benefit valuation rules with regards to defined benefit funds in terms of the suite of reforms to retirement savings coming into effect on 1 March 2015.
Tax free savings accounts
Author: Heinrich Louw (DLACliffeDekkerHofmeyr) An overhaul of the current retirement dispensation and the promotion of savings has been on the cards since at least the 2012 Budget when the Minister of Finance announced that a series of discussion papers would be released on these matters. It was revealed by National Treasury (Treasury) in a paper entitled Strengthening retirement savings (14 May 2012) that the reforms would include measures to encourage non-retirement household savings.
Tax and retirement
By Bruce Cameron Government uses the tax system to encourage you to save for retirement and to discourage you from cashing in your savings before you retire, Jenny Gordon, Alexander Forbes’s head of retail legal advice, says. This is the second article in a series of reports on the Personal Finance/Alexander Forbes Ready Set Retire conferences that were held around South Africa in March. You must take tax into consideration when you plan for retirement, but tax should not be the overriding consideration, Jenny Gordon says.
Treasury tightens up pre-retirement withdrawals
National Treasury has tweaked its proposal on how much access to your retirement savings you will be allowed to have once it becomes compulsory for you to preserve your savings. Treasury had suggested that, after legislation is introduced to prevent you from withdrawing your retirement savings before retirement, you be allowed one withdrawal per preservation fund each year, up to 10 percent of the value of your retirement savings. Now, in a discussion document released this week, it is proposing to allow one withdrawal per taxpayer each year, up to 10 percent of the value of the fund from which you withdraw.
FAQ – What are available options for a lump sum earned offshore?
I am not sure what to do with his money earned while working offshore. He writes: I work offshore and, therefore, my income is not taxable in SA. I have resigned from my company to move to another. The new company does not have a retirement/saving plan that I have been contributing into. It is Fidelity in the UK. As it was a company plan, I cannot continue with it and I am now going to get paid out this lump sum of $170 000. I want to invest this for retirement. What is the best way? Bring it into SA due to current favourable exchange rates and pay off my house, because it is about the same amount that is owed on the house?
Income protection policies: tax deduction for premiums to be abolished from 1 March 2015
Employees earning remuneration are generally prohibited from claiming tax deductions for any expenditure other than those items listed in section 23(m) of the Income Tax Act (58 of 1962). This is in contrast to persons carrying on a trade independently of an employer.
Income protection policies: deduction for premiums to be abolished
By Dan Foster, associate director: International Executive Services, KPMG Employees earning remuneration are generally prohibited from claiming tax deductions for any expenditure other than those items listed in section 23(m) of the Income Tax Act (58 of 1962). This is in contrast to persons carrying on a trade independently of an employer. One of the few deductions still available to employees is for premiums paid on income protection insurance policies. Currently, such premiums are deductible if (a) the policy covers the person against loss of income as a result of