18 June 2020
These relief measures are aimed at assisting clients through the COVID-19 pandemic and it allows you to make a change to the income you currently receive from your living annuity. These relief measures are for the period 1 June 2020 until 30 September 2020 (with the expiry date subject to change by National Treasury).
Read more about the relief measures published on 1 June 2020 in the Government Gazette.
Individuals who receive income from a living annuity will be allowed to immediately:
The income change can be made any time between now and 30 September 2020, and you will not have to wait until your next income revision date – even if you’ve already revised your income this year.
Tax is calculated using the gross income amount for the current tax year. Increasing or decreasing your income during the relief period will result in a recalculation of your projected income and therefore your income tax for the tax year. Once the income is amended again at expiry of the relief period, the income tax will be recalculated again and revised to align it with the actual income you will receive during the current tax year.
In this regard it is important to note the following:
We will accept instructions in any of the following ways:
A permanent amendment has been made to the commutation threshold for annuities. The threshold has been raised to R125 000 (previously R50 000 and R75 000), irrespective of whether you’ve made a withdrawal at retirement. This means that you can request to fully withdraw your living annuity if the value is less than R125 000. This amendment is permanent, and not related to the temporary income relief period.
We trust that you will find the relief period helpful during these challenging times. We strongly urge you to consult with a suitably qualified financial intermediary before changing your income, to ensure you are fully informed about the long-term impact of making such a change and the possible tax implications. Should you want an introduction to a financial intermediary, you are welcome to contact us and we will arrange for an intermediary in your area to contact you.
Feel free to contact the Glacier Communication Centre if you require any further information.