"retirement annuity fund"
means any fund (other than a pension fund, provident fund or benefit fund) which is approved by the Commissioner in respect of the year of assessment in question and, in the case of any such fund established on or after 1 July 1986, is registered under the provisions of the Pension Funds Act:
Provided that the Commissioner may approve a fund subject to such limitations or conditions as he may determine, and shall not approve any fund in respect of any year of assessment unless he is in respect of that year of assessment satisfied—
(a) |
that the fund is a permanent fund bona fide established for the sole purpose of providing life annuities for the members of the fund or annuities for the dependants or nominees of deceased members or for the purpose of providing any benefit contemplated in the ‘savings withdrawal benefit’ in section 1; and |
[Paragraph (a) of the proviso substituted by section 1(1)(zB) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 1(2))]
(b) |
that the rules of the fund provide— |
(i) |
for contributions by the members, including contributions made by way of transfer of members' interests in approved pension funds, pension preservation funds, provident funds, provident preservation funds or other retirement annuity funds; |
(ii) |
that not more than one-third of the member’s interest in the vested component may be commuted for a single payment, and that the remainder, calculated together with the total value of the member’s share standing to the credit of the retirement component, must be paid in the form of an annuity (including a living annuity), a combination of annuities (including a combination of methods of paying the annuity) or a combination of types of annuities except where two-thirds of the total value of the member’s interest in the vested component plus the member’s interest in the retirement component does not exceed R165 000, or where the member is deceased or where the member elects to transfer the vested component to a retirement annuity fund: |
[Words preceding paragraph (b)(ii)(a) of the proviso substituted by section 1(1)(zC) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 1(2))]
(a) |
in the case of a person who was a member of a provident fund or a provident preservation fund and who was 55 years of age or older on 1 March 2021— |
(i) |
any amount contributed to a provident fund or transferred to a provident preservation fund prior to, on and after 1 March 2021 of which that person was a member on 1 March 2021; |
(ii) |
with the addition of any other amounts credited to the member’s individual account or minimum individual reserve of the provident fund or provident preservation fund prior to, on and after 1 March 2021; and |
(iii) |
any fund return, as defined in the Pension Funds Act, in relation to the contributions or transfers contemplated in subparagraph (i) or amounts credited contemplated in subparagraph (ii); |
(b) |
in any other case of a person who was a member of a provident fund or provident preservation fund on 1 March 2021— |
(i) |
any amount contributed to a provident fund or transferred to a provident preservation fund prior to 1 March 2021; |
(ii) |
with the addition of any other amounts credited to the member’s individual account or minimum individual reserve of the provident fund or provident preservation fund as a result of the value of the member’s individual account or minimum individual reserve on 1 March 2021; and |
(iii) |
any fund return, as defined in the Pension Funds Act, in relation to the contributions or transfers contemplated in subparagraph (i) or amounts credited contemplated in subparagraph (ii), |
reduced proportionally by an amount permitted to be deducted in terms of the Pension Funds Act from the member’s individual account or minimum individual reserve of the provident fund or provident preservation fund prior to, on and after 1 March 2021.
[Paragraph (b)(ii)(a)(b) substituted by section 75(1)(e) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - deemed to have come into operation on 20 May 2016 (section 75(2))]
(iii) |
[Paragraph (b)(iii) deleted by section 2(1)(y) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]; |
(iv) |
[Paragraph (b)(iv) deleted by section 2(1)(y) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]; |
(v) |
that no member shall become entitled to the payment of any annuity or lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule prior to reaching normal retirement age; |
[Paragraph (b)(v) substituted by section 7(1)(zA) of the Taxation Laws Amendment Act, 2009 (Act No. 17 of 2009)]
(vi) |
[Paragraph (b)(vi) deleted by section 2(1)(zA) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]; |
(vii) |
[Paragraph (b)(vii) deleted by section 2(1)(zA) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]; |
(viii) |
[Paragraph (b)(viii) deleted by section 4(a) of Act No. 103 of 1976]; |
(ix) |
[Paragraph (b)(ix) deleted by section 4(a) of Act No. 103 of 1976] |
(x) |
that a member who discontinues his or her contributions prior to his or her retirement date shall be entitled to— |
(aa) |
an annuity or a lump sum benefit contemplated in paragraph 2(1)(a) of the Second Schedule payable on that date; |
(bb) |
be reinstated as a full member under conditions prescribed in the rules of the fund; |
(cc) |
the payment of a lump sum benefit contemplated in paragraph 2(1)(b)(ii) of the Second Schedule where that member’s interest in the fund is less than an amount determined by the Minister by notice in the Gazette; or |
(A) |
a lump sum benefit contemplated in paragraph 2(1)(b)(ii) of the Second Schedule where that member— |
(AA) |
is a person who is or was a resident who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control in respect of applications for that recognition received on or before 28 February 2021 and approved by the South African Reserve Bank or an authorised dealer in foreign exchange for the delivery of currency on or before 28 February 2022; |
(BB) |
is a person who is not a resident for an uninterrupted period of three years or longer on or after 1 March 2021; or |
(CC) |
departed from the Republic at the expiry of a visa obtained for the purposes of— |
(AAA) |
working as contemplated in paragraph (i) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002); or |
(BBB) |
a visit as contemplated in paragraph (b) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002), issued in terms of paragraph (b) of the proviso to section 11 of the Act by the Director-General, as defined in section 1 of that Act; |
(B) |
an amount from the retirement component and vested component, deemed to be paid as a lump sum benefit contemplated in paragraph 2(1)(b)(ii) of the Second Schedule, where a member— |
(AA) |
is a person who is not a resident for an uninterrupted period of three years or longer on or after 1 March 2021; |
(BB) |
departed from the Republic at the expiry of a visa obtained for the purposes of— |
(AAA) |
working as contemplated in paragraph (i) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002); or |
(BBB) |
a visit as contemplated in paragraph (b) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002), issued in terms of paragraph (b) of the proviso to section 11 of the Act by the Director-General, as defined in that Act; or |
(CC) |
is a person who is or was a resident who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control in respect of applications for that recognition received on or before 28 February 2021 and approved by the South African Reserve Bank or an authorised dealer in foreign exchange for the delivery of currency on or before 28 February 2022; or |
(C) |
an amount from the vested component, deemed to be paid as a lump sum benefit contemplated in paragraph 2(1)(b)(ii) of the Second Schedule, where a member— |
(AA) |
is a person who is not a resident for an uninterrupted period of three years or longer on or after 1 March 2021; |
(BB) |
departed from the Republic at the expiry of a visa obtained for the purposes of— |
(AAA) |
working as contemplated in paragraph (i) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002); or |
(BBB) |
a visit as contemplated in paragraph (b) of the definition of ‘visa’ in section 1 of the Immigration Act, 2002 (Act No. 13 of 2002), issued in terms of paragraph (b) of the proviso to section 11 of the Act by the Director-General, as defined in that Act; or |
(CC) |
is a person who is or was a resident who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control in respect of applications for that recognition received on or before 28 February 2021 and approved by the South African Reserve Bank or an authorised dealer in foreign exchange for the delivery of currency on or before 28 February 2022; |
[Paragraph (b)(x)(dd) of the proviso substituted by section 1(1)(zD) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 1(2))]
(xi) |
that upon the winding up of the fund a member’s withdrawal interest therein must— |
(aa) |
where the member received an annuity from the fund on the date upon which the fund is wound up, be used to purchase an annuity (including a living annuity) from any other fund; or |
(bb) |
in any other case, be paid for the member’s benefit into any other retirement annuity fund; |
[Paragraph (b)(xi)(bb) substituted by section 2(1)(zB) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]
(aa) as is contemplated in subparagraph (ii);
(bb) |
for the transfer of any member’s interest in any approved retirement annuity fund into another approved retirement annuity fund: Provided that the value of each individual contract being transferred must exceed R371 250: Provided further that— |
(a) |
in the case where the total member’s interest in any approved retirement annuity fund is not transferred into another approved retirement annuity fund, the value of the member’s remaining interest after the transfer must exceed R371 250; and |
(b) |
the provisions of the first proviso and paragraph (a) of the further proviso shall not apply in the case where the member’s total interest in any approved retirement annuity fund is transferred into another approved retirement annuity fund; |
[Paragraph (b)(xii)(bb) substituted by section 1(m) of the Taxation Laws Amendment Act, 2023 (Act No. 17 of 2023), Notice No. 4226, GG49894, dated 22 December 2023 - deemed to have come into operation on 1 March 2023 and applies in respect of years of assessment commencing on or after that date (section 1(6))]
(cc) |
for the benefit contemplated in subparagraph (x)(cc); or |
[Paragraph (b)(xii)(cc) substituted by section 6(1)(zE) of the Taxation Laws Amendment Act, 2010 (Act No. 7 of 2010) - effective 1 March 2009]
(dd) |
as is contemplated in Part V of the Policyholder Protection Rules promulgated in terms of section 62 of the Long-term Insurance Act; or |
[Paragraph (b)(xii)(dd) substituted by section 4(1)(zZd) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013), GG 37158, dated 12 December 2013]
(ee) |
for any deduction contemplated in paragraph 2(1)(b) of the Second Schedule. |
[Paragraph (b)(xii)(ee) substituted by section 7(1)(zC) of the Taxation Laws Amendment Act, 2009 (Act No. 17 of 2009)]
no member's rights to benefits shall be capable of surrender, commutation or assignment or of being pledged as security for any loan;
(xiii) that the Commissioner shall be notified of all amendments of the rules; and
(c) |
that the rules of the fund have been complied with. |
[Definition substituted by section 4(1)(zZb) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013), GG 37158, dated 12 December 2013]
Provided further that the Commissioner may approve a fund in respect of any year of assessment, if the Commissioner is satisfied that the rules of the fund provide for the creation of the ‘savings component’, ‘retirement component’ and ‘vested component’ as defined in section 1;
[Further proviso inserted by section 1(1)(zE) of the Revenue Laws Amendment Act, 2024, Notice No. 4924, GG50750 dated 4 June 2024 - comes into operation on 1 September 2024 and applies in respect of years of assessment commencing on or after that date (section 1(2))]