Tax and SARS knowledge base
Does reinvesting a TFI withdrawal use my limit?
Does withdrawing and reinvesting money in a tax-free investment use my contribution limit again?
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Direct answer
Yes. A withdrawal does not restore tax-free investment contribution room. If you withdraw money and later pay it back, the new payment is generally another contribution and counts against both the annual and lifetime limits.
For the 2027 year of assessment, the annual contribution limit is R46,000 and the lifetime limit remains R500,000. SARS imposes tax equal to 40% of an excess contribution.
What this means in practice
Suppose you contribute R40,000, withdraw R15,000 and then reinvest that R15,000 in the same tax year. Your net cash left in the account may be R40,000, but your contributions total R55,000. The reinvestment can therefore create an excess.
A direct transfer between approved providers is different from withdrawing into your bank account and reinvesting. Follow the provider's transfer process if you want to move an investment without using new contribution room.
Step-by-step
- Obtain contribution and withdrawal statements from every provider.
- Add gross contributions across all tax-free investment accounts.
- Do not subtract withdrawals from that total.
- Compare the total with the annual limit and your remaining lifetime room.
- Use a formal provider-to-provider transfer when moving an account.
- Check third-party data on your ITR12 before submission.
Documents and records to keep
- Provider statements and IT3(s) certificates.
- Contribution and withdrawal confirmations.
- Direct-transfer instructions and completion notices.
- A personal lifetime-contribution schedule.
- ITR12 and notice of assessment.
Important limits and exceptions
Investment growth does not use contribution room. Only contributions are counted. Unused annual room is forfeited and cannot be carried to a later year. Provider labels or account balances are not a substitute for a consolidated record across institutions.
When to get tailored advice
Get help if you hold several accounts, changed providers, made a withdrawal near year-end or SARS data differs from your records.