RECOGNISED PENSION COMMUTATION (EXEMPTION) RULES

RECOGNISED PENSION COMMUTATION (EXEMPTION)

SUBSIDIARY LEGISLATION 123.171

RECOGNISED PENSION COMMUTATION

(EXEMPTION) RULES

1st January, 2016

LEGAL NOTICE 262 of 2016.

(1) The title of these rules is the Recognised Pension

Commutation (Exemption) Rules.

(2) These rules shall come into force with effect from the year

of assessment 2017.

For the purposes of these rules

"the Act" means the Income Tax Act;

"the Commissioner" means the Commissioner for Revenue;

"recognised retirement scheme" means a retirement scheme

licensed, registered or otherwise authorised under the Retirement

Pensions Act, and which qualifies as a Recognised Overseas

Pension Scheme in accordance with the Finance Act 2004 of the

Parliament of the United Kingdom;

"retirement date" means the date when the payment of retirement

benefits commences, as prescribed in terms of the Retirement

Pensions Act, including any regulations or Pension Rules issued

thereunder;

"retirement scheme administrator" means an entity appointed to

perform duties in connection with the overall operation and the

ordinary and day-to-day operations of a recognised retirement

scheme and which is so licensed, registered or otherwise authorised

under the Retirement Pensions Act, including any regulations or

Pension Rules issued thereunder;

"total pension" means the total value of the assets held by a

recognised r etireme nt scheme f or a m emb er an d whi ch are

available to provide retirement benefits to the member, such value

being determined on the member’s retirement date.

(1) The total amount of capital sum received by way of

commutation of pension by a member of a recognised retirement

scheme which is exempt from the tax under the provisions of article

12(1)(h) of the Act shall amount to a maximum of thirty percent

(30%) of the total pension.

(2) The provisions of sub-rule (1) shall apply irrespective of

whether the said capital sum is paid as one lump sum or in a series

of tranches within one year from retirement date as prescribed

under the Retirement Pensions Act, including any regulations or

Pension Rules issued thereunder.

The retirement scheme administrator shall provide the

Commissioner with the information in its possession regarding

RECOGNISED PENSION COMMUTATION (EXEMPTION)

sums paid to a member of a recognised retirement scheme as the

Commissioner may require for the purpose of administration of

these rules.