QUESTION 9

Leonard transferred his benefit from the GEPF to a pension preservation fund in April 2022. The tax-free pre-1 March 1998 benefit that was transferred to the preservation fund was R890 000. The benefit in the preservation fund is now R2 154 000. Leonard has not received any lump sum benefit that was taxed on the retirement fund lump sum benefit tax tables before. The rules of the preservation fund allow members to take as much as the Income Tax Act allows as a lump sum. What is the maximum lump sum retirement benefit that Leonard could get from the preservation fund without having to pay any tax on it?

a. R550 000

b. R890 000

c. R1 440 000

d. R718 000

e. None of the above