Page 319 - SAIT Compendium 2016 Volume1

Second Schedule INCOME TAX ACT 58 OF 1962 Second Schedule
‘lump sum bene t’ includes—
(a) any amount determined in respect of the commutation of an annuity or portion of an annuity—
(i) payable by; or
(ii) provided in consequence of membership or past membership of,
a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;
and
(b) any xed or ascertainable amount (other than an annuity)—
(i) payable by; or
(ii) provided in consequence of membership or past membership of,
a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund,
whether in one amount or in instalments, but does not include any amount deemed to be income accrued to a person in terms of section 7 (11);
[De nition of ‘lump sum bene t’ substituted by s. 47 (1) (b) of Act 30 of 1998, by s. 36 (d) of Act 3 of 2008, by s. 58 (1) (e) of Act 60 of 2008 and by s. 79 (1) of Act 7 of 2010 and amended by s. 91 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this amendment applies in respect of amounts due and payable on or after that date.]
‘pension fund’, in relation to any person, means—
(a) a fund which has in respect of the year of assessment in question or any previous year of assessment been approved
by the Commissioner as a pension fund under paragraph (c) of the de nition of ‘pension fund’ in section 1 or a
corresponding de nition in any previous Income Tax Act; or
(b) a public sector fund (other than a fund referred to in paragraph (b) of the de nition of ‘provident fund’), the rules of
which wholly or mainly provide for annuities on retirement to its members,
if during any such year the person was a member of such fund;
[De nition of ‘pension fund’ amended by s. 31 (b) of Act 90 of 1962 and substituted by s. 46 (1) (d) of Act 94 of 1983, by s. 41 (1) (b) of Act 28 of 1997 and by s. 91 (1) (c) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this substitution applies in respect of amounts due and payable on or after that date.]
‘provident fund’, in relation to any person, means—
(a) a fund which has in respect of the year of assessment in question or any previous year of assessment been approved
by the Commissioner as a provident fund as de ned in section 1 of this Act or the corresponding provisions of any
previous Income Tax Act; or
(b) a public sector fund, the rules of which provide for bene ts in a lump sum exceeding one-third of the capitalised
value of all bene ts (including lump sum payments and annuities) to its members on retirement,
if during any such year the person was a member of such fund;
[De nition of ‘provident fund’ substituted by s. 41 (1) (d) of Act 28 of 1997 and by s. 91 (1) (d) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this substitution applies in respect of amounts due and payable on or after that date.]
‘public sector fund’ means a fund referred to in paragraph (a) or (b) of the de nition of ‘pension fund’ in section 1; [De nition of ‘public sector fund’ inserted by s. 91 (1) (e) of Act 22 of 2012 – date of commencement deemed to have
been 1 March 2012; this de nition applies in respect of amounts due and payable on or after that date.]
‘retire’, in relation to a person who is a member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund, means to become entitled to the annuity or lump sum bene t
contemplated in the de nition of ‘retirement date’;
[De nition of ‘retire’ amended by s. 23 (b) of Act 90 of 1964 and by s. 35 (1) of Act 21 of 1995 and substituted by s. 36 (e) of Act 3 of 2008 and by s. 91 (1) (f) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this substitution applies in respect of amounts due and payable on or after that date.]
‘retirement annuity fund’ in relation to any person, means a fund which has in respect of the year of assessment in question or any previous year of assessment been approved by the Commissioner as a retirement annuity fund as de ned in section 1 of this Act or the corresponding provisions of any previous Income Tax Act, if during any such year the person was a member of such fund.
[De nition of ‘retirement annuity fund’ substituted by s. 91 (1) (g) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this substitution applies in respect of amounts due and payable on or after that date.]
2. (1) Subject to section 9 (2) (i) and paragraphs 2A and 2C, the amount to be included in the gross income of any person in terms of paragraph (e) of the de nition of ‘gross income’ in section 1 shall be—
[Words in para. 2 (1) preceding item (a) substituted by s. 92 (1) (a) of Act 22 of 2012 (date of commencement deemed to have been 1 January 2012; that substitution applied in respect of amounts received or accrued during years of assessment commencing on or after that date) and by s. 92 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; this substitution applies in respect of amounts due and payable on or after that date.]
(a) any amount received by or accrued to that person by way of a lump sum bene t derived in consequence of or following upon—
(i) his or her retirement or death;
(ii) the termination or loss of his or her employment due to—
(AA) his or her employer having ceased to carry on or intending to cease carrying on the trade in respect of which he or she was employed or appointed; or
[Subsubitem (AA) substituted by s. 80 (1) (c) of Act 7 of 2010.]
(BB) that person having become redundant in consequence of his or her employer having effected a general
reduction in personnel or a reduction in personnel of a particular class:
Provided that this subitem does not apply to any amount received by or accrued to a person by way of a lump sum where that person’s employer is a company and that person at any time held more than ve per cent of the equity shares or members’ interest in that company; or
[Subitem (ii) amended by s. 80 (1) (b), (d) and (e) of Act 7 of 2010.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 311
INCOME TAX ACT – SCHEDULES