National Treasury has gazetted the Notices on Expanding Access to Living Annuity Funds.
The Notices give effect to the legislative framework required to implement the tax measures in this regard to combat the COVID-19 pandemic. This follows the President's address to the nation on 21 April 2020 and the announcement by the Minister of Finance on further tax measures to combat the COVID-19 pandemic.
"Included in the further tax measures was the expansion of access to living annuity funds, as outlined in Treasury's Media Statement published on 23 April 2020," said Treasury in a statement.
This relief measure will see individuals, who receive funds from a living annuity, being temporarily allowed to immediately either increase (up to a maximum of 20% from 17.5%) or decrease (down to a minimum of 0.5% from 2.5%) the proportion they receive as annuity income.
National Treasury said this will assist individuals, who either need cash flow immediately or who do not want to be forced to sell after their investments have underperformed.
"As a result, living annuity members can now approach their financial sector providers to adjust the proportion they receive as annuity income, instead of waiting up to one year until their next contract anniversary date," read the statement.
Furthermore, the minimum value of the annuity or part of the retirement interest, which an individual can withdraw in the event that there was any previous lump sum commutation in the fund, was amended and replaced with a single threshold of R125 000. Further details can be found in the Draft Explanatory Memorandum, published on 19 May 2020 on the Treasury website.
The Gazetted Notices on Expanding Access to Living Annuity Funds can be found on the National Treasury (www.treasury.gov.za) and SARS (www.sars.gov.za) websites.