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Tax on Retirement Funds Act, 1996 (Act No. 38 of 1996)

1. Definitions

 

For the purposes of this Act any word or expression to which a meaning has been assigned in the Income Tax Act, 1962 (Act No. 58 of 1962), hereinafter referred to as the Income Tax Act, bears the meaning so assigned, unless the context within which such word or expression is used otherwise indicates and-

 

"actuarial value"

means the value placed at any particular date, on the assets and liabilities—

(a) of a retirement fund, as the case may be—
(i) by the valuator appointed to the fund in terms of section 9A of the Pension Funds Act, 1956 (Act No. 24 of 1956), in terms of the latest actuarial report with a valuation date before the commencement of the relevant tax period, particulars of which shall be lodged with the Financial Services Board before the end of such tax period and found acceptable by such Board;
(ii) by the actuary responsible for the valuation of the assets and liabilities of a pension fund contemplated in section 2(1) of the last-mentioned Act, in terms of the latest valuation made in respect of such pension fund with a valuation date before the commencement of the relevant tax period, particulars of which shall be lodged with the Commissioner before the end of such tax period and found acceptable by the Commissioner in consultation with the Chief Actuary of the Financial Services Board; or
(iii) by the actuary responsible for the valuation of the assets and liabilities of a fund or scheme contemplated in paragraph (a) or (b) of the definition of "pension fund" in section 1 of the Income Tax Act, in terms of the latest statutory valuation made in respect of such fund or scheme with a valuation date before the commencement of the relevant tax period—
(aa) which valuation shall be on the basis as is required in terms of the relevant statutory requirements; and
(bb) particulars of which shall be lodged with the Commissioner before the end of such tax period and found acceptable by the Commissioner in consultation with the Chief Actuary of the Financial Services Board; or
(b) in the case of an untaxed policyholder fund, by the insurer's actuary appointed in terms of section 20 of the Long-term Insurance Act, 1998 (Act No. 52 of 1998), in terms of the latest valuation on the basis as required for the purposes of the definition of 'value of liabilities' in section 29A of the Income Tax Act, 1962, with a valuation date before the commencement of the relevant tax period;

 

"Financial Services Board"

means the Financial Services Board established by section 2 of the Financial Services Board Act, 1990 (Act No. 97 of 1990), or its successor;

 

"fund"

means a retirement fund or an untaxed policyholder fund, as the case may be;

 

"guaranteed annuity"

means an annuity contemplated in section 29A(4)(a)(iii) of the Income Tax Act, where such annuity is contractually subject to a guaranteed increase at a fixed rate, which rate may be zero, over the full term of the annuity, excluding any annuity which may participate in any bonus distributions by the insurer;

 

"insurer"

means any long-term insurer as defined in section 1 of the Long-term Insurance Act, 1998 (Act No. 52 of 1998);

 

"interest"

includes—

(a) any amount contemplated in the definition of "interest" in section 24J(1) of the Income Tax Act;
(b) any amount which is deemed to be interest in terms of section 8E of the Income Tax Act; and
(c) any amount contemplated in section 24K of the Income Tax Act;

 

"market value"

in relation to any asset, means the amount which a person having the right freely to dispose of such asset might reasonably expect to obtain from a sale of such asset in the open market;

 

"pensioner"

means any person to whom an annuity is being paid by a fund;

 

"rental income"

includes—

(a) any royalty;
(b) any premium or like consideration contemplated in paragraph (g) of the definition of 'gross income' in section 1 of the Income Tax Act;
(c) any dividend (other than those distributed out of profits of a capital nature) distributed by a fixed property company as defined in section 1 of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981); and
(d) any consideration payable by a borrower to the lender in respect of any 'lending arrangement' as defined in section 1 of the Uncertificated Securities Tax Act, 1998 (Act No. 31 of 1998), as consideration for the use of any security, in so far as such amount is not included in paragraph (a) of the definition of 'interest';

 

"retirement fund"

includes—

(a) any "pension fund", "provident fund" or "retirement annuity fund" as defined in section 1 of the Income Tax Act;
(b) [Deleted by section 31 of the Revenue Laws Amendment Act, 1996 (Act 46 of 1996)].
(c) any pension fund, provident fund or retirement annuity fund deemed to have been approved as a pension fund, provident fund or retirement annuity fund for the purposes of the Income Tax Act or to have been established by law in the Republic, as the case may be, as contemplated in section 56 of the Income Tax Act, 1995 (Act No. 21 of 1995);

 

"tax"

means the tax on retirement funds and provisional tax payable in terms of this Act;

 

"tax period"

means—

(a) the period 1 March 1996 to 31 August 1996;
(b) the period 1 September 1996 to 28 February 1997; and
(c) every consecutive period of 6 months ending on 31 August or the last day of February thereafter, as the case may be; other than a period ending after 28 February 2007.

 

"untaxed policyholder fund"

means a fund contemplated in section 29A(4)(a) of the Income Tax Act.