Question:
Can a tax directive be reversed? If the fund was made aware it is a mistake or misunderstanding between the Fund Adminstrator and myself in terms of the "pretax" and "net" instead of "after tax"? I made the fund aware that the funds I required were net that is after tax but that is what was taxed and withdrawn? Is there a recourse if the fund refuses because they believe they can only do it if they are the ones who committed the error?
Answer:
Tsepo, Once the money has been paid out, you cannot reverse the "transaction." The fund does not know how much tax will be levied on a withdrawal (only SARS knows this), so you cannot expect the fund to work with after-tax pay-out amounts. They are therefore correct to assert that the error was yours, not theirs. You have no recourse against this as you signed off the pay-out instruction.
