Page 45 - SAIT Compendium 2016 Volume1

s 1
INCOME TAX ACT 58 OF 1962 s 1
(bb) if the member elected to have any lump sum bene t contemplated in paragraph 2 (1) (b) (ii) of the Second Schedule transferred to this pension preservation fund and who made this election while they were members of that other fund;
[Item (bb) substituted by s. 7 (1) (p) of Act 17 of 2009.] (iii) former members of a pension fund or nominees or dependants of that former member in respect of whom an ‘unclaimed bene t’ as de ned in the Pension Funds Act is due or payable by that
fund; or
[Sub-para. (iii) substituted by s. 7 (1) (zD) of Act 24 of 2011 and by s. 4 (1) (zH) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(iv) persons who have elected to transfer to that fund amounts awarded to those persons in terms of any court order contemplated in section 7 (8) of the Divorce Act, 1979 (Act 70 of 1979), from any pension fund or pension preservation fund for the bene t of those persons;
[Sub-para. (iv) substituted by s. 7 (1) (q) of Act 17 of 2009.] (b) payments or transfers to the fund in respect of a member are limited to any amount contemplated in paragraph 2 (1) (a) (ii) or (b) of the Second Schedule or any unclaimed bene t as de ned in the Pension Funds Act, 1956 (Act 24 of 1956), that is paid or
transferred to the fund by—
[Words in para. (b) preceding sub-para. (i) substituted by s. 7 (1) (zE) of Act 24 of 2011 – date of commencement deemed to have been 1 March 2009.]
(i) a pension fund, pension preservation fund, provident fund or provident preservation fund of which that member was previously a member; or
[Sub-para. (i) of para. (b) of proviso substituted by
s. 3 (1) (r) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 March 2016*; the substitution applies iro years of assessment commencing on or after that date.]
(ii) a pension fund or pension preservation fund of which such member’s former spouse is or was previously a member and such payment or transfer was made pursuant to an election by such member in terms of section 37D (4) (b) (ii) of the Pension Funds Act;
[Sub-para. (ii) substituted by s. 7 (1) (s) of Act 17 of 2009 and by s. 4 (1) (zI) of Act 31 of 2013 – date of commencement: 12 December 2013.]
[Para. (b) substituted by s. 4 (1) (o) of Act 60 of 2008 and amended by s. 7 (1) (r) of Act 17 of 2009.]
(c) with the exception of amounts transferred to any other pension fund, pension preservation fund or retirement annuity fund, not more than one amount contemplated in paragraph 2 (1) (b) (ii) of the Second Schedule is allowed to be paid to the member during the period of membership of the fund or any other pension preservation fund: Provided that this paragraph applies separately to each payment or transfer to the fund contemplated in paragraph (b);
[Para. (c) substituted by s. 4 (1) (o) of Act 60 of 2008 and by s. 7 (1) (t) of Act 17 of 2009 and amended by s. 2 (1) (s) of Act 22 of 2012 – substitution of words preceding the proviso deemed to have come into operation on 1 March 2012.]
(d) (e)
a member, other than a member contemplated in paragraph (a) (iii) of this proviso, will become entitled to a bene t on his or her retirement date; and not more than one-third of the total value of the retirement interest may be commuted for a single payment, and that the remainder must be paid in the form of an annuity (including a living annuity) except where two-thirds of the total value does not exceed R165 000 or where the member is deceased: Provided that in determining the value of the retirement interest an amount calculated as follows must not be taken into account:
(a) in the case of a person who is a member of a provident fund and who is 55 years of age or older on 1 March 2016—
(i) any amount contributed to a provident fund of which that person is a member on 1 March 2016;
(ii) with addition of any other amounts credited to the member’s individual account of the provident fund prior to 1 March 2016; and
(iii) any fund return, as de ned in the Pension Funds Act, in relation to the contributions contemplated in subparagraph (i) or amounts credited contemplated in subparagraph (ii); or
(b) in any other case of a person who is a member of a provident fund—
(i) any amount contributed to a provident fund prior to 1 March 2016;
(ii) with addition of any other amounts credited to the member’s individual account of the provident fund prior to 1 March 2016; and
(iii) any fund return, as de ned in the Pension Funds Act, in relation to the contributions contemplated in subparagraph (i) or amounts credited contemplated in subparagraph (ii),
reduced by any amounts permitted in terms of any law to be deducted from the member’s individual account of the provident fund:
[Para. (e)† substituted by s. 4 (1) (p) of Act 60 of 2008, by s. 3 (1) (s)‡ of Taxation Laws Amendment
Prelex
Wording of sub-para. (i) of para. (b) of proviso in force until 1 March 2016
(i)a pension fund or any other pension preservation fund of which such member was previously a member; or
* See footnote in annotation to para. (a) (i) of de nition of ‘pension fund’.
† Note: Para. (e) was substituted by s. 4 (1) (zJ) of Act 31 of 2013 (as substituted by s. 119 (1) (b) of Act 43 of 2014), a provision that was to have come into operation on 1 March 2016. The said para. (zJ) of (s. 4 (1)) has, however, been deleted and s. 119 has been repealed, by ss. 143 (1) (a) and 155 (1), respectively, of Taxation Laws Amendment Act, 2015.]
‡ When the Taxation Laws Amendment Bill 29 of 2015 was introduced in October 2015, clause 3 (6) and (7) provided that paras. (s) and (t) of clause 3 (1) (both substituting the same para. (e)) would come into operation on 1 March 2016 and 1 March 2018, respectively. However, the relevant committee of the National Assembly substituted ‘2016’ for ‘2018’ in subclause (7) (iro commencement date of para. (t)). (See B 29A – 2015 and B 29B – 2015 in this regard.) It is submitted that the retention of para. (s) might have been an oversight. The intention of the legislature was probably that only para. (t) should come into operation and that para. (s) should be deleted. There is, however, a further small
SAIT CompendIum oF TAx LegISLATIon VoLume 1 37
INCOME TAX ACT – SECTIONS