Question:
Can I transfer an retirement annuity in my name, to another person to continue with that. Scenario - me and my wife both have separate retirement annuities (same underwriter) can we transfer both our retirement annuities into another fund in her name and also ad to that a cash lump sum as an investment to boost the new retirement annuity .
Answer:
Arrie, No, you cannot transfer an retirement annuity to another person. This is not an option in terms of the Income Tax Act. The practical reason is that that person who takes out an retirement annuity receives certain tax breaks, some of which are then recouped when the retirement annuity is accessed. The amount of tax recouped could be reduced by transferring the retirement annuity to another person who may be in a position to pay less tax on the proceeds (eg if they - unlike the original holder - have not exhausted their R500 000 tax free cash lump sum allowance).
