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

4. Determination of taxable amount of untaxed policyholder fund

 

The taxable amount in relation to any untaxed policyholder fund in respect of a tax period shall be an amount determined in accordance with the formula—

 

 

in which formula—

(a) "T" represents the taxable amount to be determined;
(b) "A" represents the income of such untaxed policyholder fund determined in accordance with the provisions of section 3 in respect of such tax period;
(c) "B" represents the portion of symbol "A" attributable to assets referred to in section 29A(4)(a)(i) of the Income Tax Act as allocated to retirement funds in terms of section 9 during such tax period;
(d) "C" represents the portion of symbol "A" attributable to assets held during such tax period—
(i) representing business of such untaxed policyholder fund as contemplated in section 29A(4)(a)(iii) of the Income Tax Act (excluding assets contemplated in paragraph (c));
(ii) equal to the actuarial value of liabilities under guaranteed annuities; and
(iii) which have been accounted for and held in a separate portfolio on 1 March 1996 in terms of a practice consistently applied by such untaxed policyholder fund before such date;
(e) "D" represents the actuarial value of the liabilities of the untaxed policyholder fund less the actuarial value of the liabilities relating to the assets contemplated in paragraphs (c) and (d); and
(f) "F" represents the value represented by symbol "D" less the sum of the actuarial value of the liabilities relating to the assets contemplated in
(i) section 29A(4)(a)(ii) of the Income Tax Act (excluding assets in respect of amounts allocated to retirement funds contemplated in paragraph (c) and assets representing guaranteed annuities contemplated in paragraph (d)); and
(ii) section 29A(4)(a)(iii) of the Income Tax Act (excluding assets—
(aa) in respect of amounts allocated to retirement funds contemplated in paragraph (c);
(bb) representing guaranteed annuities contemplated in paragraph (d); and
(cc) contemplated in subparagraph (i)).".