Module Outline - Retirement Benefits 2022 - BAccSci _ BCom.pdf

TAXATION III ACCN 3013/3021(FT) / ACCN3014 (PT) MODULE 13 RETIREMENT BENEFITS MODULE OUTLINE 1. Learning Outcomes After studying this module you should be able to do the following:...

TAXATION III ACCN 3013/3021(FT) / ACCN3014 (PT) MODULE 13 RETIREMENT BENEFITS MODULE OUTLINE 1. Learning Outcomes After studying this module you should be able to do the following: 1. Identify the nature and source of a lump sum received (i.e. whether it is received from an employer or a fund). 2. Identify the event that lead to the lump sum being received (i.e. withdrawal, resignation, retirement or death). 3. Calculate and/or discuss the tax consequences of a lump sum paid out upon the death of a person. 4. Calculate and/or discuss the tax consequences of a foreign lump sum or annuity received by a resident. 5. Calculate and/or discuss the tax consequences of a South African lump sum or annuity received by a non-resident. 6. Identify the deductions that can be claimed against a gross lump sum received by or accrued to a taxpayer in terms of paragraph 5 and paragraph 6 of the Second Schedule, and calculate the net lump sum received or accrued to a taxpayer. 7. Understand and calculate the effect of a lump sum received by or accrued to a taxpayer on employees’ tax, where applicable. 8. Calculate and/or discuss the tax payable on a pre-retirement lump sum received by or accrued to a taxpayer. 9. Calculate and/or discuss the tax payable on a retirement lump sum received by or accrued to a taxpayer. 10. Calculate and/or discuss the tax payable on a lump sum received by or accrued to a taxpayer, where a previous pre-retirement lump sum was received earlier. 11. Calculate and/or discuss the tax payable on a lump sum received by or accrued to a taxpayer, where a previous retirement lump sum was received earlier.  12. Calculate and/or discuss the exemption of the non-deductible element of compulsory annuities in terms of section 10C. 2. References Topics Reference to the Income Tax SILKE Act and Second Schedule References 1. Introduction Second Schedule 9.1 2. Section 10C exemption S10C of the Income Tax Act 9.4 3. Lump sums from Employers: Restraint of trade Para (cA)/(cB) of gross income 4.5 definition Compensation for loss of Para (d) of gross income definition 4.6 & 9.2.1 office Commutation of amounts due Para (f) of gross income definition 4.8 & 9.2.2 4. Fund benefits: Para (e) of the definition of gross 4.7 & 9.3 income and Second Schedule Lump sum source rules S9(2)(i) 9.3 Retirement fund lump sum Paras 2(1)(a), 3, 3A, 5 and 6 9.3.1 benefit Retirement fund lump sum Paras 2(1)(b), 4 and 6 9.3.2 withdrawal benefit Allocations to spouses on Para 2(1)(b)(iA) 9.3.2 divorce Transfers between funds for Para (eA) of gross income 9.3.3.1 public sector fund definition (Read through and be aware of this only) 5. Lump sum retirement benefit Para 54 of the Eighth Schedule 17.10.2 exclusions 6. Lump sums from a Public Sector Para 2A 9.3.3.2 Pension Fund (Read through and be aware of this only) 2