Question:
In terms of my maintenance order, I need to pay my wife half of my living annuity, i.e. split it. Is this possible?
Answer:
Jacquie, In terms of a Government Gazette notice dated 11 March 2009, it is not permissible to split a living annuity, and to pay out two separate annuities. The tax breaks associated with contributions to a retirement fund apply to the individual, and the Receiver recovers some of these breaks by taxing the annuity income in retirement, by splitting the annuity, the two parties separately would together pay less tax on the annuity income, than if one party received, and paid tax, on the combined amount. So, to comply with your maintenance order, you will have to split the after-tax proceeds of the annuity annually with your former wife.
