Question:
I have read that Retirement Annuities are also very effective estate planning tools. The proceeds are exempt from estate duty, capital gains tax and executor fees because the cash amount can be paid directly to the beneficiaries if they exercise this option. What must I do to confirm this specific option is exercised?
Answer:
Andre, You just have to die. The option - as to how to receive the benefit - vests with the beneficiaries. Note however that the Retirement Annuity lump sum benefit is taxed per the retirement lump sum tax table as though you had received the benefit. Total lump sum amounts over R1 050 000 will be taxed at 36%. Any contributions not claimed for taxed will be subject to estate duty rather than lump sum tax.
The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.
