Section 10(1)(gC)(ii) exempts foreign pension lump sums. Section 9(2)(I) determines the source of the pension income. Whilst the employment has been carried out in South Africa, it is my understanding that the pension lump sum withdrawal from the UN Staff
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
We copied section 18 below for ease of reference:
Officials of the United Nations shall … Be exempt from taxation on the salaries and emoluments paid to them by the United Nations …
The general meaning of emolument doesn’t include a lump sum from a pension fund and the question is whether the word ‘emoluments’ would include the lump sum paid out by the UN Pension Fund. We don’t have a view on that, but agree with you that section 10(1)(gC) will not be available.
If the transfer of the retirement interest was directly to a retirement annuity fund, it will only be tax neutral if the UN Pension Fund was an approved, by SARS, retirement fund. It would have been seen as a contribution to the fund and the deduction would have had to be made under section 11F.
As we said in our previous response, related to the employment income, it is suggested that a letter be obtained from the UN Pension Fund with regard to the taxability of the lump sum withdrawal.