Early withdrawal from South African retirement annuities
Everything you need to know about the early withdrawal from South African retirement annuities and transferring your funds abroad
Retirement annuity withdrawal rules for South African emigrants
The full withdrawal of the capital in retirement annuity policies are possible at any age, once you have:
(1) ceased your South African tax residency with the South African Revenue Service (SARS) and
(2) remained a South African tax non-resident for 3 (three) years after tax cessation.
What is tax emigration and how do you cease South African tax residency?
Tax emigration is the process to apply to the South African Revenue Service (SARS) to cease your South African tax residency and change your tax status from resident to non-resident for tax purposes.
What is a retirement annuity?
A Retirement Annuity is a retirement savings product offered by insurance companies as a tax-efficient savings vehicle for retirement.
Generally, these savings can only be accessed after the age of 55 when the contractual retirement date is met.
Once retirement date is reached, and the retirement option is exercised, you can then access and withdraw a maximum of (1/3) one third of your funds in the retirement annuity as a lump sum that will be subject to income tax. The remaining funds (2/3) two thirds in the retirement annuity must be used to provide you with a pension, which is taxable.
Nevertheless, the entire capital value of a retirement annuity can be withdrawn after a waiting period of three years following the termination of tax residency in South Africa.
|RETIREMENT ANNUITY AMOUNT
|First R25 000
|R25 000 – R660 000
|18% above R25 000
|R660 001 – R990 000
|R114 300 + 27% above R660 000
|R203 400 + 36% above R990 000
- Retirement lump sums received after 1 October 2007,
- Withdrawal lump sums received after 1 March 2009,
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