6 March 2023 – Amendment to Section 1.1, Paragraph (b) (xii)(bb) of the definition of “retirement annuity fund” in section 1(1) of the Income Tax Act
Section 1.1, Paragraph (b) (xii)(bb) of the definition of “retirement annuity fund” in section 1(1) of the Income Tax Act has been amended to allow for transfers between Retirement Annuity Funds (RAF).
The effect of the amendment is that the word “total” is deleted, and the following conditions are inserted –
- The value of each policy/contract being transferred from one retirement annuity fund to another retirement annuity fund must exceed R371 250 (see highlighted portion blue above); and
- The value remaining in the retirement annuity fund after the transfer must exceed R371 250.
However, there is no monetary restriction on the transfer value if the full/total value of the retirement annuity fund is transferred to another retirement annuity fund (i.e., there is no amount remaining in the retirement annuity fund after the transfer).
Where a taxpayer opts to transfer one or more policies/contracts to a new RAF you are requested to complete a separate tax directive application for each transfer. You will be advised when a single tax directive application can be submitted for all policies for which the transfer is being completed for.