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Retirement anuity and withdrawal tax implications

Posted 15 July 2015 under Tax Questions


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Thando says:
15 July 2015 at 13:43

I just resigned and I want to transfer R150,000 to my retirement annuity and withdraw the R130,000 as cash. What are the tax implication in doing this?

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TaxTimTaxTim says:
15 July 2015 at 13:45

Where is the money currently held?


Thando says:
15 July 2015 at 13:49

At ABSA Wealth Builder under the company xxx.


TaxTimTaxTim says:
15 July 2015 at 13:52

You would pay tax on the entire withdrawal based on the tables in our Lump sum calculator


Thando says:
15 July 2015 at 13:57

I was under the impression that I only get taxed on the cash withdrawal and the transfer to my personal retirement annuity fund was tax free? So if I want to withdraw some of the cash, I will not be able to do that?


TaxTimTaxTim says:
15 July 2015 at 14:19

It is only tax free if you transfer from one fund to another fund such as from a pension fund to a pension preservation fund. What type of fund is the ABSA Wealth Builder?


Thando says:
15 July 2015 at 15:09

It is a provident fund, I have R286,000 on the fund and I want to transfer R150,000 to my personal retirement annuity fund at Liberty and withdraw the rest as cash.


TaxTimTaxTim says:
15 July 2015 at 15:41

You need to transfer it to a Provident Preservation Fund in order for the amounts not to be taxed - however you can speak to your RAF provider at Liberty to see if they can assist you in setting up a tax free transfer.


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