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How to reflect transfer of Pension Fund to Retirement Annuity on ITR12?

Posted 13 August 2013 under Tax Q&A


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Hello, Within the last tax year I changed jobs and in doing so had to transfer my pension fund from my former employer to my Retirement Annuity as my new employer does not offer a pension fund. On my ITR12 issued on e-filing I can see this lump sum pension fund amount reflected on a separate page with a directive number. Also I received a certificate from my Retirement Annuity institute reflecting my contributions for the tax year and this included the lump sum the I transferred.

My question is when filling in tax code 4006 do I include all contributions to the Retirement Annuity including the lump sum transfer taking into account it is reflected on my ITR12 as a separate page for the original pension fund?

I have submitted it to date as the full amount under 4006 as this is what the certificate I got showed it as. I have been selected for an audit and am just wondering if I have filled in something wrong as I cant see anything else incorrect. I have submitted all supporting documentation as requested but have had no feedback as yet. Each time I query the status it says that documents have been received but not yet processed, my status shows as correction filed and I have been issued an ITA34 but not sure what this means.

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TaxTim TaxTim says:
13 August 2013 at 20:55

When SARS have completed their assessment they will send you a "completion letter" which will indicate the results of your verification. This could take anywhere from a few days to 9 months depending on where you have fallen in the SARS audit trail.

Was any tax deducted on the IRP5 received from the fund?

Mark says:
14 August 2013 at 8:29

Hello

No tax was deducted on the IRP5 for the Pension Fund.

My question is should I include the pension fund amount under 4006?

For arguments sake lets say my total contribution to RA for the year is R 50 000 of which R40 000 is the amount transferred from the Pension Fund and R10 000 is what I contributed throughout the year. Do I reflect R50 000 or R 10 000 in code 4006

Mark

TaxTim TaxTim says:
14 August 2013 at 16:53

You would reflect the whole amount as the old policy lumpsum was paid to you and then you deposited it in the RA fund. SARS will only allow a certain amount to be deducted anyway because of percentage limitations, but will carry this forward to future years in order for you to get the deduction.


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