Page 323 - SAIT Compendium 2016 Volume1

Second Schedule INCOME TAX ACT 58 OF 1962 Second Schedule
Prelex
Wording of sub-para. (3) in force until its substitution wef date of promulgation of Taxation Laws Amendment Act, 2015
(3) If a person who is a member of a provident fund retires from such fund before he or she reaches the age of 55 years on grounds other than ill-health, any lump sum bene ts received by or accrued to such person in consequence of or following upon such retirement shall, unless the Commissioner having regard to the circumstances of the case otherwise directs, be assessed to tax not in accordance with the provisions of paragraph 5 but in accordance with the provisions of paragraph 6 as though it were a lump sum bene t derived by such person in consequence of or following upon such person’s withdrawal or resignation from such fund.
(4) . . .
[Sub-para. (4) added by s. 63 (1) (b) of Act 60 of 2008, substituted by s. 60 (1) (a) of Act 17 of 2009 and deleted by s. 60 (1) (b) of Act 17 of 2009.]
BENEFITS ACCRUING UPON RETIREMENT AND BENEFITS DEEMED TO HAVE ACCRUED IMMEDIATELY PRIOR TO PERSON’S DEATH: DEDUCTIONS (para. 5)
[Heading substituted by s. 98 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012. The substitution applies in respect of amounts due and payable on or after that date.]
5. (1) The deduction to be allowed for the purposes of paragraph 2 (1) (a) is an amount equal to so much of—
(a) the person’s own contributions that did not rank for a deduction against the person’s income in terms of section 11 to any pension fund, pension preservation fund, provident fund, provident preservation fund and retirement annuity
fund of which he or she is or previously was a member;
[Item (a) substituted by s. 112 (1) of Act 31 of 2013 (‘or (n)’ deleted) – date of commencement: 1 March 2016 (‘1 March 2015’ replaced by ‘1 March 2016’ by s. 127 (1) of Act 43 of 2014); substitution applies iro amounts received or accrued on or after that date.]
(b) any amount transferred for the bene t of the person to any pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund as a result of an election made in terms of section 37D (4) (b) (ii) of the Pension Funds Act;
[Item (b) substituted by s. 86 (a) of Taxation Laws Amendment Act, 2015 (‘, 1956 (Act 24 of 1956)’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(c) any amount that is deemed to have accrued to the person as contemplated in paragraph 2 (2) (b);
(d) any amount, to the extent that that amount was paid or transferred to a pension preservation fund or provident preservation fund as an unclaimed bene t as de ned in section 1 of the Pension Funds Act, and was subject to tax
prior to that transfer or payment; and
[Item (d) substituted by s. 86 (b) of Taxation Laws Amendment Act, 2015 (‘, 1956 (Act 24 of 1956)’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(e) any other amounts in respect of which the formula in paragraph 2A applies, which have been paid into a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund for the person’s bene t by a public sector fund, less the amount represented by symbol A when so applying that formula,
as has not been exempted in terms of section 10C or has not previously been allowed to the person as a deduction in terms of this Schedule in determining the amount to be included in that person’s gross income.
[Words following on item (e) substituted by s. 98 (1) (c) of Act 22 of 2012 (as amended by s. 202 (1) (b) of Act 31 of 2013) – date
of commencement: 1 March 2014; the substitution applies in respect of amounts received or accrued on or after that date.] [Sub-para. (1) substituted by s. 98 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 1 March
2012; the substitution applies in respect of amounts due and payable on or after that date.]
(2) The amount determined in terms of subparagraph (1) may not exceed the amount of the lump sum bene t in respect
of which it is allowable as a deduction.
(3) For the purposes of this paragraph, the surrender value of any policy of insurance ceded or otherwise made over
to the person by any pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund and ceded or otherwise made over by the person to any other such fund, or any amount paid by the person into the latter fund in lieu of or as representing such surrender value or a portion thereof, shall be deemed to be an amount paid into the latter fund by the former fund for the bene t of the person.
[Sub-para. (3) substituted by s. 98 (1) (d) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012; the substitution applies in respect of amounts due and payable on or after that date.]
[Para. 5 amended by s. 31 of Act 90 of 1962, by s. 21 of Act 72 of 1963, s. 25 of Act 90 of 1964, by s. 35 of Act 88 of 1971, by s. 35 of Act 69 of 1975, by s. 27 of Act 113 of 1977, by s. 28 of Act 104 of 1980, by s. 48 of Act 94 of 1983 and by s. 25 of Act 65 of 1986, by s. 37 (1) of Act 20 of 2006 and by s. 51 (1) of Act 8 of 2007 and substituted by s. 61 (1) of Act 17 of 2009.]
WITHDRAWAL OR RESIGNATION: WINDING UP: DEDUCTIONS (paras. 6–7)
6. (1) The deduction to be allowed for the purposes of paragraph 2 (1) (a) (ii) or (b) is an amount equal to—
(a) in the case of a lump sum bene t contemplated in paragraph 2 (1) (b) (iA) and (iB), so much of the bene t as is paid
or transferred for the bene t of the person from a—
(i) pension fund, pension preservation fund, provident fund or provident preservation fund into any pension fund,
pension preservation fund, provident fund, provident preservation fund or retirement annuity fund; or (ii) retirement annuity fund into any retirement annuity fund; and
[Item (a) substituted by s. 92 (1) of Act 24 of 2011, amended by s. 99 (1) of Act 22 of 2012 and substituted by s. 113 (1) (a) of Act 31 of 2013 – date of commencement: 1 March 2016 (‘1 March 2015’ replaced by ‘1 March 2016’ by s. 128 (1) of Act 43 of 2014); substituted item applies iro amounts received or accrued on or after that date.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 315
INCOME TAX ACT – SCHEDULES