The old "average rate of tax" laws still apply in cases of resignation or retrenchment up until 1st March 2009 when the following tables will apply to what SARS calls "pre-retirement withdrawals" from Retirement Funds.
This will finally see the end of the "average rate of taxation formula" for lump sums as well as the end of the tax-free R1,800 on resignation and R30,000 on retrenchment.
Here are the new tables:
R 0 – R 22,500 0%
R 22,501 – R 600,000 18% of the amount above R 22,500
R 600,001 – R 900,000 R 103,950 + 27% of the amount above R600,001
R 900,001 and above R 184,950 + 36% of the amount above R900,001
Effective from 1 March 2009 which means these new tax brackets (for pre-retirement lump sum withdrawals) will be introduced
