Question:
I am a UK citizen (SA permanant resident) I have been working here for over 30 years,I am about to go on pension and wish to retire and reside back in the UK , my question is do I have other options when I invest my compusory 2thirds ie do I have to invest my 2thirds in south africa or can I invest it overseas .do the same rules apply to me as I am not a SA citizen
Answer:
Alex, Yes, the same rules apply to you so you must purchase an annuity in South Africa and transfer the annuity payments overseas. That is an expensive hassle. The only way around that is to resign before you reach normal retirement date. You can then have your pension fund paid out as a lump sum (net of tax), which you can then take overseas with you. Paying the tax is obviously the problem in this scenario, as you lose out on transferring tax free to the annuity provider and then drawing an annuity that attracts a low(er) average tax rate.
