Amendment 190 provides a framework for managing your family’s assets with a long-term perspective, provisions for transfer from one generation to the next, strong legal protection against outside threats, and a special tax regime.
Option A - A pension recognized under Amendment 190:
This is essentially a pension based on deposits to a pensionary provident fund that were taxed when deposited, or on deposits drawn from a savings account. This holds both for a policy approved as a provident fund and for a regular provident fund. The pension will be tax-exempt, including the portion derived from the profits accumulated in the provident fund over the years and will not be subject to capital gains tax.
Option B - Withdrawing the money, starting at age 60:
The possibility of a one-time withdrawal, subject to the following conditions:
1. The beneficiary is over 60.
2. The beneficiary receives a guaranteed life-expectancy pension that exceeds the minimum amount of the pension.
3. A declaration that the beneficiary does not have other Amendment 190 provident funds from which the tax-exempt payouts exceed the ceiling stated in the table.
In the case of a one-time withdrawal, a nominal 15% tax applies to the profit component of the amount withdrawn (but only to the sum that exceeds the annual benefit ceiling).
The advantages of managing your Investments through a provident fund:
• Deferral of taxes until you withdraw the money
• Savings on the costs associated with the investment—the investments are managed by the supervising company.
• Diversity of the investment and the advantages accruing to the provident fund as an institutional investor
• Transfer of the funds to the next generation with fewer bureaucratic headaches