Question:
I would like to do a full withdrawal from my pension preservation fund prior to me turning 55. My previous pension fund was Telkom, is there any tax concession carried forward from the Telkom pension fund that will apply to the withdrawal, as if so ho is this calculated?
Answer:
Nigel,
We are not aware of any special tax concessions related to the Telkom pension fund (in the manner of those that apply to the GEPF, for example) but we are not experts on this topic. You can only withdraw from your preservation fund before age 55, if you have not previously made a withdrawal from your preservation fund. On withdrawal you are taxed per the withdrawal lump sum tax table. The first R25 000 is not taxed, the balance to R660 000 is taxed at 18%, the balance to R990 000 at 27% and the remainder at 36%. This table is applied to the aggregate of your retirement fund withdrawals, ie you only receive the tax-free amount of R25 000 once.
