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John says: 26 April 2016 at 12:33 I started working in Jan 2012 for company. In Dec 2014 I was retrenched and paid a severance package. I preserved my provident fund contributions in a preservation fund and haven't touched it since(about R100k). I started working for company Y in Apr 2015 and ended my employment with them on 31 Jan 2016. I again preserved my pension fund contributions in a pension preservation fund (about R35k). In March 2016 I ran into some financial trouble and decided to withdraw the entire pension preservation fund of R35k. This would be my first withdrawal in my lifetime. I was under the impression I would pay (R35k - R25k)*0. 18 = R1800 tax but instead was charged R35k*0. 18 = R6300 as per the tax directive with source code 3920. Do you know why I have not seen the R25000 tax free benefit? What should I do from here? |
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TaxTim says: 2 May 2016 at 18:23 When you preserved your provident fund, did you pay any tax at that time? |
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John says: 2 May 2016 at 18:34 No, I didnt. As far as I know any transfer to a preservation fund should be tax free |
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TaxTim says: 4 May 2016 at 6:49 Yes, that is correct. It is strange why they did not apply the first R25 000 exemption. You would need to call the fund and find out why did they not do this. |
