Can a taxpayer transfer from one tax free investment to another without attracting penalties? The rule has changed from 1 March 2018 whereby a taxpayer may transfer from one tax free investment to another however SARS has raised a penalty herein.
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
Under section 12T(6) of the Income Tax Act, any—
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transfer of an amount in respect of a tax free investment of a person to another tax free investment of that person; or
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amount received by or accrued in respect of a tax free investment,
shall not be taken into account in determining whether that person contributed in excess of the amounts contemplated in subsections (4)(a) and (c) as a contribution in respect of that other tax free investment.