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Gordhan moves to calm workers over new pension laws

Author: Jenni Evans (Fin24). Controversial new pension laws only apply to money saved from 1 April this year, Finance Minister Pravin Gordhan said on Thursday. “Anything you saved up to March this year is not touched. The old rules still apply,” Gordhan said at a post-Cabinet briefing broadcast from Pretoria. Panic and anger set in among workers when President Jacob Zuma signed the new tax laws such as the 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act into force.

SARS explains 2015 Tax Administration Amendments

Author: Lorys Charalambous (Tax-News.com) On December 17, the South African Revenue Service (SARS) issued an explanatory memorandum on the 2015 Tax Administration Laws Amendment Bill (TALAB). In particular, the memorandum looks at the TALAB provisions giving effect to the collection of information from South African financial institutions (FIs), and the associated obligation on the FIs to register with SARS regarding the Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement (IGA) with the United States that was signed in July last year.

Changes that are Likely to Impact your Payroll

The much-anticipated legislation to give effect to the tax harmonisation reforms of retirement funds has finally been signed into law by the President.  The changes will be implemented with effect from 1 March 2016, as was anticipated prior the official publication of the legislation in the Government Gazette on 8 January 2016. Below is a short summary highlighting certain aspects of the changes:

Think carefully before transferring your Retirement Annuities

Author: Lisa Griffith, an Associate Director at BDO Wealth Advisers. Paying penalties when you choose to transfer your retirement annuities has been a thorny issue for investors in RA’s for some time. The lure of a unit trust based retirement annuity, or concerns about mediocre performance, may prompt investors into switching to a new generation product. However, this process will not always result in the investor being in an improved position and so it may ultimately not be prudent to transfer after all.

Treasury forges ahead with retirement reform – Tax harmonisation of retirement funds to be implemented March 1, 2016

Author: Ingé Lamprecht (Moneyweb). Tax harmonisation of retirement funds to be implemented March 1, 2016. JOHANNESBURG – National Treasury has confirmed that regulations to harmonise the taxation of contributions to pension funds, retirement annuities and provident funds will take effect on March 1 next year. This means that provident fund members will only be able to take one third of their pension benefit as a cash lump sum at retirement and that the remaining two thirds will have to be annuitised. However, this will only apply to contributions made after March 1, 2016 and for those below 55 years of age. Moreover, members will only be required to annuitise once their retirement savings exceed an increased amount of R247 500. The previously proposed threshold was R150 000.

Tax changes for retirement funds to be implemented from 2016

The tax harmonisation reforms for retirement funds will be implemented from 1 March 2016‚ the Treasury says. “This is in terms of the current law legislated in 2013‚ and amended in 2014 by shifting the effective date to 1 March 2016 (ie the Taxation Laws Amendment Act‚ No 39 of 2013‚ as amended by Act No 43 of 2014). The 2015 Taxation Laws Amendment Bill did not amend the scheduled implementation date‚ “but only amends the R150‚000 de minimis threshold to R247‚500; closes certain coverage gaps; and requires a review of the legislation after two years from the effective date‚ and to report this review to Parliament”‚ the Treasury said.

Three things you should know about retirement reform

Author: Ingé Lamprecht (Moneyweb). Unpacking annuitisation, the increased deduction and the implications for high net worth individuals. Regulations to harmonise the tax treatment of retirement fund contributions are set to be introduced from March 1 next year, but questions remain about whether the reforms will really encourage household savings and improve the plight of vulnerable individuals. This article looks at three of the changes and their broader ramifications.

Tax treatment of contributions to retirement funds

Author: Jenny Klein The date of implementation of new rules relating to the tax treatment of contributions to retirement funds, which were expected to take effect on 1 March 2015, was postponed until 1 March 2016, in terms of the Taxation Laws Amendment Act of 2014. Among other changes, the new rules will affect the employees’ tax implications of employer contributions to retirement funds, and the deductibility for income tax purposes by the member of such contributions, thus affecting both participating employers and members. In addition, depending on the nature of the benefits available to members, the retirement fund may be obliged to provide information to the participating employer in respect of contributions for specific categories of fund members. The implications of some of these changes are highlighted below.

Tax treatment of contributions to retirement funds

Author: Jenny Klein (Tax Manager at ENSAfrica) The date of implementation of new rules relating to the tax treatment of contributions to retirement funds, which were expected to take effect on 1 March 2015, was postponed until 1 March 2016, in terms of the Taxation Laws Amendment Act of 2014. Among other changes, the new rules will affect the employees’ tax implications of employer contributions to retirement funds, and the deductibility for income tax purposes by the member of such contributions, thus affecting both participating employers and members. In addition, depending on the nature of the benefits available to members, the retirement fund may be obliged to provide information to the participating employer in respect of contributions for specific categories of fund members. The implications of some of these changes are highlighted below.

The tax free nature of a voluntary severance package

Loss of employment through retrenchment (forced or voluntary) is a reality many employees face in the current economic climate. Over the last number of years, various tax concessions have been made to ease the financial burden on employees facing retrenchment, mainly in the form of tax free thresholds which apply to certain lump sum employer payments. Navigating the tax pitfalls of retrenchment is important, as it is not necessarily guaranteed that all forms of payment upon retrenchment will qualify for preferential tax treatment.