Amended definition for “retirement annuity fund” in the ITA
6 March 2023
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., no amount is remaining in the retirement annuity fund after the transfer).
What is the impact of this amendment?
A separate tax directive application needs to be completed for each transfer. Taxpayers will be advised when a single tax directive application can be submitted for all policies for which the transfer is being completed.
