Taxation on Resignation or Dismissal

A benefit payable from your Savings Pot on resignation or dismissal is taxed at your marginal tax rate.
A benefit payable from your Vested Pot is taxed according to the following fixed scale:

 
R0 – R27 500 0%
R27 501 – R726 000 18% of the amount exceeding R27 500
R726 001- R1 089 000 R125 730 plus 27% of the amount exceeding R726 000
R1 089 001 and above R223 740 plus 36% of the amount exceeding R1 089 000

This applies to the aggregate of resignation or dismissal lump sums received over the member’s lifetime after 1 March 2009.  This means that you cannot get R27 500 from the UCTRF and R27 500 from the next fund you join. Both benefits will be added together and only the first R27 500 will be tax free. The balance will be taxed according to the above scale.

Any resignation, dismissal or retrenchment benefit previously received tax-free (including any tax-free amount received from your Employer as a severance package), as well as tax-free portions for amounts paid out after 1 March 2009 in respect of divorces or maintenance orders, will be added to the lump sum prior to applying the table.

Please Note:

  • Any transfer value from the AIPF will be tax free.
  • Any contributions to your Vested Pot that were previously taxed will be tax free.
For an estimate of the tax you will pay, use the UCTRF Benefit Taxation Calculator





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