Take Advantage of South African Pension Schemes offering a More Fruitful Retirement

May 19, 2015 | Retirement Planning, South African Expats


Section 40 (ee) allows South African Pension Schemes to Grow Tax-Free

If you are thinking of starting a pension or perhaps you have one already, transferring it to a scheme which takes advantage of 40 (ee) could be a very wise move. The schemes are approved by the South African Revenue Service (SARS), and pension providers who take advantage of this law are in a good position to offer you a highly competitive pension scheme.

So what else does a pension scheme adhering to 40 (ee) have to offer?

Section 40(ee) of the Income Tax (Guernsey) Law 1975

Section 40 (ee) is a very important clause. It allows companies to base a pension fund in South Africa, where it can grow in an almost tax-free environment. It also affords you a high amount of control over your pension, allowing you to withdraw between the ages of 55-70. This is the perfect pension for South African expats.

The following benefits also apply:

  • Part of the pension can be taken as a lump sum on retirement. You do not have to buy an annuity
  • No estate duty on the value of your retirement fund
  • The schemes are adaptable should you decide to relocate to a different country
  • Your pension grows tax-free growth in South Africa
  • No donations tax applies when you transfer funds from South Africa to another pension scheme
  • The scheme is available in different currencies
  • You choose where you want your pension invested
  • Highly tax efficient and you have control

Right now, it is difficult to think of a better pension solution. Especially given the tax-free element. The only problem that may ensure further down the road is that a change of South African government could see Section (ee) altered or scrapped. Political pressure from other countries may also see the section change.

Currently, however, that is not an issue. Finance Minister Nhlanhla Nene’s 2015 budget speech did not talk about removing the section which is so valuable to South African expats.

Let’s Talk Pensions

If you are a South African expat and are interested in a pension scheme which is mostly tax-free, then talk to me in the first instance. I am an award winning financial professional with years of experience in wealth management and retirement planning. Simply click here and complete the Call Back Service form. Together we can make your pension pot grow and grow.

Sources: Cnbcafrica.com, SARS

For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]


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