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.