My client had an amount of R190 636 Retirement Annuity Fund to be carried forward to the 2017 tax year as per 2016 ITA34. Amount has been carried forward since before 2014 tax year. Upon submission of 2017 tax return, balance brought forward reflects as R
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
There is nothing in the Income Tax Act, that would prevent the taxpayer from using the balance (or excess contributions) at the end of February 2017 as a deduction under section 11F.
The ‘excess amount’, the balance carried forward, will of course, in the first instance, be deducted from the lump sum withdrawal and the balance thereof, if the lump sum is less than that or no lump sum is taken, will reduce the annuity (the section 10C exemption).
This may well be an error on the assessment.