How do I fill in a Recognition of Transfer (ROT) form?

For many of us figuring out your taxes can be a quite a struggle, but when you are running a business it is even more important to keep track of what is going on with your taxes. We know that we aren’t the experts so we asked partners of ours that are! Our friends at Exceed Finance helped us understand the importance of a Recognition of Transfer form and how to complete it.

The purpose of a Recognition of Transfer form (ROT) is for the Receiving Fund / Insurer to confirm that the amount reflected on the tax directive, submitted by the Transferring fund for either the transfer or the purchase of the annuity, was received. A recognition of transfer moves money from one fund to another and the ROT form is sent to the new fund that the money is being transferred to. The signed ROT is returned to the original fund and then the money is transferred.

As of 1 July 2017, the Receiving Fund or the Insurer has to submit the ROT form where a member elected that:
• The full benefit or a portion of the benefit must be transferred to another fund before retirement (ROT01), or
• The full retirement benefit is transferred to a retirement annuity fund on retirement (ROT01), or
• Where the two-thirds or more of the benefit must be used to purchase an annuity or annuities on retirement or by the beneficiary/beneficiaries on death of the member (ROT02).

From middle December 2018 SARS started to send email reminders to Fund administrators / Insurers if a ROT form is still outstanding. Reminders will also be sent where a tax directive application was submitted and a ROT is required and the ROT was not submitted within 20 working days. SARS will also send a sms or email to the taxpayer if the Receiving Fund administrator / Insurer did not submit a ROT form to confirm the amount transferred or used to purchase an annuity. The taxpayer can then contact the fund. When a taxpayer submits his/her annual return and the ROT is not received, the taxpayer’s return will be rejected, with a reject message that the ROT is outstanding.

In cases like this SARS will inform the taxpayer, on submission of his/her return:
• The Receiving Fund or Insurer did not submit the ROT to confirm that the amount indicated on the on the tax directive was received or used to purchase an annuity.
• If the Receiving Fund or Insurer does not submit the ROT within 10 working days SARS will regard the amount on the tax directive as normal income and the amount will be taxable in full.

We hope that this kind of information will help you out so that you can correctly submit all your tax forms. Visit our friends at Exceed if you are still struggling!