How much tax will I pay on my pension resignation benefit?


Question:

My pension resignation benefit is R2 173 774. If I resign at the age of 51, how much tax will I pay on the above mentioned figure?

Answer:

Shereen,

You will be taxed per the withdrawal lump sum tax table. Assuming you have not previously withdrawn from a retirement fund, you will pay tax of R643 509 and get out R1 530 265. If your pay-out includes any contribution you made that were not permitted as a tax deduction, this would be returned to you tax-free (ie it would increase your pay-out).

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.


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