Post retirement will the client be taxed as per normal retirement tax table on the full investment amount? Or how will it work?
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
To the extent that the individual takes a lump sum from the retirement interest, the individual will be taxed according to the relevant lump sum tax table. This tax table is applied cumulatively or to the aggregate of amounts previously withdrawn – we mentioned that in our first response.
If the retirement interest is commuted in an annuity, no taxable income will arise. The individual will then be taxed on the annuity amounts.