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Sanlam clients with pensions or annuities are kindly requested to note the impact of legislative changes linked to tax deductions (PAYE) on these investments, and Sanlam’s recent communication with them in this regard.
These amendments became effective from 1 March 2022 and SARS subsequently issued Sanlam with an instruction on the tax rates that must be applied to a client’s annuity income.
The tax rates experienced by some clients might be higher than an individual’s current PAYE tax rate but may also help to avoid unexpected tax debt at the end of a tax year.
Sanlam sent all affected clients a letter in the week of 11 March 2024, providing the impact on your income based on the rates received from SARS at the beginning of March 2024.
If you missed the communication or need a reminder, please refer to the frequently asked questions on this page.
The tax rates have been captured on our system and applied to the affected Sanlam annuity incomes.
The options available to you if a fixed rate was applied:
If you were affected by the fixed rate directive issued by SARS in March 2023 but excluded from the directive received from SARS in March 2024, your fixed tax rate will be reverted back to the PAYE tax rates, unless you had opted-out of the fixed rate before end February 2024.
You have the option to provide us with an instruction for a fixed voluntary rate higher than PAYE.
Complete, sign and email the attached “SARS PAYE Deduction Percentage” form to SARS PAYE Deduction Percentage form to instalments.tax@sanlam.co.za.
You can contact our Client Contact Centre should you have any further enquiries.
Tel: 0860 726 526
Yes, if you opted-out prior to end March 2024 (when we received the latest list from SARS), you will then remain as opted-out.
If you opted-out in 2023, you will remain opted-out in 2024. You may decide to opt-in and have the fixed rate applied to your income. You will need to send us a request in writing to Instalments.Tax@sanlam.co.za.
Unfortunately not, as money had already been paid over to SARS and out of our control. SARS have confirmed that any additional tax amounts received will be refundable on assessment.
Yes, effective from next payment and in line with the income tax deduction tables of SARS (2024/2025). For more information, it should be referred to Instalments.Tax@sanlam.co.za.
If tax percentage was higher than the fixed rate percentage, the fixed rate percentage will override the percentage the member had selected prior to the rate change. In these instances, less tax will therefore be deducted and the client must send his/her request in writing to revert back to the higher percentage by emailing Instalments.Tax@sanlam.co.za. We will then be able to adjust the rate to the higher percentage from the next income payable.
Adjustments to the income tax rates must be done before the below cut-off dates to ensure the income for that month is adjusted to the normal PAYE tax rate of SARS.
If an opt-out is done after the cut-off dates, the opt-out will only apply the following month.
The following are the cut-off dates for adjusting the rates within a specific month.
In cases where the client did not pay tax in the previous tax years, an IT3(a) was issued for the taxable income and this information was given through to SARS with Sanlam’s reconciliation.
The client needs to contact SARS, as we do not have access to their full portfolios with SARS. The fixed rate would have been applied to all income the client receives from various sources, not only from Sanlam.
We can only do the calculation for life and term annuities the client receives from Sanlam. These should be referred to Instalments and Tax.
Clients should only contact SARS if they are querying the fixed rate.
The client must put the request in writing and send it to Instalments.Tax@sanlam.co.za.
SARS updated their systems to ensure that the correct taxpayers are targeted and the correct fixed rate is applied.