ARTICLE · 06 JULY 2007

Taxation Laws Amendment Bills 2007

Norton Rose Fulbright South Africa

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Two Bills have recently been published in their final form, giving effect to the amendments announced in the Budget Speech last February. The most significant amendments relate to the decision to simplify the calculation of the taxable portion of lump sums from pension, provident and retirement annuity funds, and to reduce the tax burden on such sums.

South AfricaTax

Peter Surtees

Two Bills have recently been published in their final form, giving effect to the amendments announced in the Budget Speech last February. The most significant amendments relate to the decision to simplify the calculation of the taxable portion of lump sums from pension, provident and retirement annuity funds, and to reduce the tax burden on such sums. Most of the other amendments consist of minor changes to wording in several sections of and Schedules to the Act.

Retirement Lump Sums

The calculation of the taxable portion of lump sums from funds on retirement has been simplified and amended so that they are taxed less heavily than has hitherto been the case. Members of pension and retirement funds are legally entitled to withdraw up to one third of the amounts standing to their credit when they retire. Provident fund members receive the whole amount due to them by the fund. In the past the taxable portion of lump sums from funds was determined by two linked formulas, A and B in

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