The Income Tax Act was changed to allow individuals to withdraw their full value in cash, before attaining the retirement age of age 55, from a retirement annuity fund when they emigrate or when they leave South Africa due to an expired work visa.    

Therefore you may access your benefit under the following conditions:

1. Your emigration is recognised by the South African Reserve Bank for purposes of exchange control, or
2. You cease to be a tax resident; or
3. You leave South Africa when your work visa expires

AND

1. You are no longer regarded as a resident by the South African Reserve Bank for purposes of exchange control.   

If you emigrate and decide to withdraw from your retirement annuity fund, the following process, in brief, will apply:

1. If you do not have an active and correct Income Tax reference number, you must obtain one  from the South African Revenue Services (“SARS”);
2. You must apply to SARS for an emigration tax clearance certificate;
3. Thereafter you may apply to the South African Reserve Bank for your foreign capital allowance in respect of emigration.

The document required for this application is Form M.P.336(b) and is titled:

Exchange Control
Emigration: Application for Foreign Capital Allowance
The document may be downloaded from the Reserve Bank Website: www.resbank.co.za

For persons who left South Africa before the commencement of these laws, without formally and financially emigrating, the above process will also apply.

If you take cash from your retirement annuity, the monies will be taxed in accordance with the “lump sum on withdrawal” tax scale.

This tax scale is applied on a cumulative basis. Therefore if the tax scale was previously applied to any type retirement fund benefit that you withdrew from, SARS will take into account the tax previously paid.

The applicable lump sum withdrawal tax scale for the 2017 tax year is tabulated below. 

Multilect Administrators (Pty) Ltd. Resbank.co.za