I am 55 years and still working, but cashed in 1/3 of my preservation fund and received the sum of app 478 k, 315 K of which was the tax free portion, so I paid 18 % tax on the balance of app 166K. How would this be calculated once this has been taken into the 2013/2014 tax year? Would the tax free portion be exempt from tax or will this amount be re-taxed?
The tax on lump sums is a full and final tax and therefore no further calculation would take place. The fund manager would have issued an IRP5/IT3a for this payout indicating the taxes paid. It will not come into your normal taxable income calculation.
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