Page 6 - P6 Slide Taxation - Lecture Day 7 - Various Topics
P. 6
Annuity = periodic payments
• Who can pay an annuity?
- RAF, PF, PrF, Employer, Insurance policy, a trust .
- Where a person sells his business/part thereof and requires the buyer to
settle the consideration in annuity payments.
Characteristics of an annuity:
= fixed , annual amount (may be divided into pmt’s)
= payment must be reoccurring in nature
= must be a compulsory payment
Remember: s 10(2)(b) prohibits the exemption of local dividends
(s 10(1)(k)) paid in the form of an annuity!
• Section 10A: Purchased annuities?
• = lump sum from PF/RAF/PrF is used to purchase annuity from an
insurer.
→ Capital portion of annuity is exempt (capital portion will be provided!)
• Section 10C: Exemption for non-deductible annuity ?
• = from 1 March 2014, iro non-deductible s 11(k) and s 11(n) contributions.
