A reader asks if he can make cash withdrawals from two separate funds without owing money to Sars.
preservation fund from a previous job that allows me to retire at 50 and aquestion is about the withdrawal of lump sums.
Five years later, I decide to retire from the second fund. Can I take one-third in cash on this as well? And if the retirement tax tables have changed by then and the tax-free amount is, say, R600,000, does this mean another R100,000 is tax free from the one-third withdrawal?Changes to the legislation governing retirement fund withdrawals became effective on March 1 2021, and one-third of any type of retirement vehicle can be withdrawn at retirement.
Withdrawals from retirement funds are viewed in aggregate. So, while you can exercise a choice on the withdrawal amount each time you retire from a specific fund, the tax table is applied to the aggregate of all lump sums previously accessed in addition to the current lump sum. Also bear in mind that any tax owed to the South African Revenue Service, as well as previously disallowed contributions, can further affect the tax-free amount available.
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