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Paying tax on a provident fund

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A Fin24 user wants to go on early retirement, but is not sure what the tax implications would be. He writes:

I am 56 years old and would like go on early retirment.

My concern is the tax on my provident fund, which is worth R855 000.

My member portion is approximately R300 000 and the balance is interest and company contributions. I owe the fund R150 000.

How much tax would I have to pay the South African Revenue Service?

Marc Sevitz of TaxTim responds:

The value of the fund being R855 000, it would attract tax of R166 950 if you were to withdraw from the fund early in the 2015 tax year.

If you owe the fund R150 000, you would most likely need to settle that after the tax has been deducted on the gross value.

- Fin24

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