Can I claim retirement annuity contributions that I did not previously qualify for?


Question:

I have a question I've asked several advisors, but don't yet have a clear answer.

I took out a Libery RA in 1998, and another in 2002. I paid about 10% of salary into them, and took the tax deductions from SARS each year.

I then joined a large company in 2006 and they had a provident fund that I had to join. I invested about 10% of salary into that, and continued with my retirement annuity investments.

The problem is, by joining the provident fund, I unwittingly increased my "pensionable" income. So come tax return time, I was unable to claim investments in my personal retirement annuities, given the limits of my pensionable income had changed dramatically.

I continued to invest in the retirement annuities until 2009 when I made them paid up (I was travelling overseas on a contract). I am now emigrating, and so am cashing in the retirement annuities.

However, given that the retirement annuity contributions were supposedly tax-advantaged, my assumption is that I am still owed tax back by SARS for the three years of investment I made where I saw no tax benefit at the time.

I am trying to get clear on whether that's actually the case, how I can track how much tax I'm owed back, and then whether SARS can/will take that into account when I cash in the retirement annuities in December.

Any ideas?

Answer

Adrian,

Apologies for the late response, although your question looks familiar, so we may have answered it already. Your contributions not deducted for tax, will be returned to you as part of your tax-free lump sum, but only if you
submitted the contributions in you tax return (even though you knew you would not be able to claim them). SARS keeps a record of unclaimed contributions and applies these to the pay-out.


The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.


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