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Taxation of Lump Sum Benefits

Retirement fund lump sum benefits (retirement or death) and severance lump
sum benefits

The tax-free lump sum benefit upon death, retirement, and in respect of
severance benefits (as defined in the income Tax Act), is R 500 000. The
rates follow below:

0-500 000                                   0% of taxable income
500 001-700 000                     18% of taxable income above 500 000
700 001-1050 000                   36 000 + 27% of taxable income above 700 000
1050  001 and above               130 500 + 36% of taxable income above 1050 000

Retirement fund lump sum withdrawal benefits

Retirement fund lump sum withdrawal benefits refer to lump sums from a
pension, pension preservation, provident, provident preservation or retirement
annuity fund upon withdrawal from the fund.

0-25 000                                     0% of taxable income
25 001-660 000                       18% of taxable income above 25 000
660 001-990 000                    114 300 + 27% of taxable income above 660 000
990 001 and above                 203 400 + 36% of taxable income above 990 000

These tax tables apply cumulatively to retirement and severance lump sums benefits.