Question:
1. What percentage tax does SARS deduct when one resigns from a government pension fund that gets paid into your bank account. 2. I have just submitted my SARS tax return and owe R1 800 for the current tax year (submitted on 30 September 2013). I do not have any disputes with SARS - will this delay my pension fund pay-out?
Answer:
Ivan,
SARS will apply the withdrawal lump sum tax table to your cash gratuity. Assuming you have not previously withdrawn from a retirement fund, you will receive the first R22 500 tax-free, you will pay tax of 18% on the balance to R600 000, 27% on the balance to 27% and 36% on any amounts above 900 000. Any previous retirement fund withdrawals are taken into account when applying this tax table. Re your second question, this should not hold up your pension fund pay-out, although if you settled the amount owing, it would certainly remove any doubt.
