Page 48 - SAIT Compendium 2016 Volume1

s 1
(b)
INCOME TAX ACT 58 OF 1962 s 1
[that] the rules of the fund provide—
(i) that all annual contributions of a recurrent nature
to the fund shall be in accordance with speci ed
scales;
(ii) that membership of the fund throughout the
period of employment shall be a condition of the employment by the employer of all persons of the class or classes speci ed therein who enter his employment on or after the date upon which— (aa) the fund comes into operation; or
(bb) the employer becomes a participant in that fund;
(iii) that persons who immediately prior to the said date were employed by the employer and who on the said date fall within the said class or classes may, on application made within a period of not more than 12 months as from the said date, be permitted to become members of the fund on such conditions as may be speci ed in the rules;
(iv) that 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 employee 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 5 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;
(v) that a partner is regarded as an employee of the partnership;
(vi) that the rules of the fund have been complied with; and
[Para. (b)* of the proviso substituted by s. 2 (1) (f) of Act 94 of 1983 and by s. 3 (1) (v) 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.]
(c) that the rules of the fund have been complied with: Provided further that a fund contemplated in paragraph (i) of the further proviso to the de nition of ‘provident preservation fund’ which is deemed to be approved or which is approved in terms of that de nition or which fails to submit its rules as required by that paragraph is deemed with effect from the earlier of the date of the deemed approval or 30 September 2010 to be a fund which is not approved in terms of this de nition;
[De nition of ‘provident fund’ amended by s. 2 (1) (d) of Act 65 of 1986, by s. 4 (1) (r) and (t) of Act 60 of 2008 and by s. 6 (1) (z) of Act 7 of 2010.]
‘provident preservation fund’ means a pension fund organisation which is registered under the Pension Funds Act and which is approved by the Commissioner in respect of the year of assessment in question: Provided that the Commissioner may approve a fund subject to such limitations and conditions as the Commissioner may determine, and shall not approve a fund in respect of any year of assessment unless the Commissioner is satis ed in respect of that year of assessment that the rules of the fund provide that—
[Words preceding the proviso substituted by s. 4 (1) (zP) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(a) membership of the fund consists of—
(i) former members of any other pension fund,
pension preservation fund, provident fund or provident preservation fund whose membership of that fund has terminated due to—
[Words in sub-para. (i) of para. (a) of the proviso preceding item (aa) substituted by s. 3 (1) (w) 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.]
(aa) resignation, retrenchment or dismissal from employment and who elected to have any lump sum bene t that is payable as a result of the termination transferred to that fund;
Prelex
Wording of para. (b) of proviso in force until 1 March 2016
(b) that the rules of the fund contain provisions
similar in all respects to those required to be contained in the rules of a pension fund in terms of subparagraphs (aa), (bb), (cc), (ee) and (ff) of paragraph (ii) of the proviso to paragraph (c) of the de nition of ‘pension fund’; and
Prelex
Words in sub-para. (i) of para. (a) of proviso preceding item (aa) in force until 1 March 2016
(i) former members of a provident fund whose membership of that fund has terminated due to—
* Para. (b) was also substituted by s. 4 (1) (zO) of Act 31 of 2013, a provision that was to have come into operation on 1 March 2016 (‘2015’ replaced by ‘2016’ by s. 119 (1) (d) of Act 43 of 2014)). The said para. (zO) 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.
† See footnote in annotation to para. (a) (i) of de nition of ‘pension fund’. ‡ See footnote in annotation to para. (a) (i) of de nition of ‘pension fund’.
40 SAIT CompendIum oF TAx LegISLATIon VoLume 1