Some points of interest in a nutshell.
There has been a lot written and said about the 2014 budget. I would like to highlight three points pertaining specifically to retirement planning and investing.
Retirement Savings Reform
- Withdrawal of retirement benefits when leaving an employer: The tax free portion has been increased to R25 000. Thereafter up to an amount of R660 000 there will be taxation of 18%.
- Retirement lump sum taxation: The tax free portion has been increased from R315 000 to 500 000. Thereafter, up to R700 000, there will be taxation of 18%.
- Remains the same at R23 800 per annum (below 65 years); R34 500 (65 years and over)
Capital gains on the disposal of assets are included in taxable income and remain the same with:
- the maximum effective rate of tax for individuals and special trusts being 13.3%
- an annual exclusion of R30 000