Expats living outside SA must first answer the following questions before they agree to emigrate financially:
- Provide a family structure and background information on the immediate family, i.e.:
- Married, single, children?
- Do your spouse and all your minor children reside with you in a foreign country
- If not, provide some background information on the location and reason therefor, concerning your immediate family. Any intention for them to join you soon?
- Your family home in SA:
- Did you sell or rent it out? If rented out, is it a long-term rental agreement?
- Do you own a holiday or house on the family farm, always available to you?
- When you and you and the family visit South Africa, where will you reside?
And now the questions we will be asking:
Formal or financial emigration is the process to formally change your exchange control status from resident to non-resident. It is also sometimes known as Excon Exit.
Financial emigration will not affect a South African’s right to retain their South African citizenship or dual citizenship. It is thus a purely financial process.
Following financial emigration from South Africa, a person can remain tax resident in SA, based on the time spent in the country and subject to the double taxation agreement (DTA) in which the person will be living in future.
It is indeed time to consider the tax cost and consequence for aliens investing with Uncle Sam.
Yes, South Africans are aliens. President Trump may or may not have referred to people from South Africa as living in a s’hole country, who am I to say! The IRS and USA tax laws most certainly labels us South Africans without an USA passport or green card as non-resident aliens.
We may not be from Mars nor Jupiter yet we are, upon death to pay FET (Federal Estate Tax) on our USA situs assets.
FET’s maximum rate is 40% and there is no spousal roll over. The exempt amount is a mere $60 000. No further SA estate duty is payable on the said USA assets, as there is a treaty in place
No spousal roll-over you ask? Yes, no roll over and the take home is that USA stock and cash held by you USA stock broker, should NOT be bequeathed to your spouse!
No, not to the offshore trust either as your wife will be taxed, upon her death assuming she is the surviving spouse, on the USA situs assets held within the offshore trust.
Who then, should be nominated as the named legatee in your will, as the person to inherit eBay, Facebook and all other USA equities?
Indeed an interesting question!
Contact Hugo van Zyl with your tax questions.
South Africans living in the UAE (Dubai) or Quatar (Doha) not paying South African tax on their foreign earned salary, in most cases will remain tax resident in SA.
The 183/+60-day rule only speaks to the (partial) exemption of remuneration from employment. South Africans will continue to pay SA tax on worldwide income from all other income, including most retirement fund income albeit that the retirement fund is foreign based. Immigrant South African may enjoy some limited tax exemption on foreign pension, yet the SA retirement funds will indeed pay SA taxable retirement benefits, albeit that contirbutions were made from tax exempt foreign employment income.
(Post by TaxConnections Member in South Africa Hugo van Zyl)
There is so many new tax acronyms, one can’t be blamed for not always knowing the full phrase behind the tax acronym.
To guide you, all from a South African perspective yet they are all well-known international acronyms or abbreviations.
During February 2016, the beleaguered South African Minister of Finance, Pravin Gordhan made a serious attempt to balance government’s books. Being an election year, the increase in wealth taxes went down well with the grassroots support base of the ruling ANC.
During February 2016 the beleaguered South African Minister of Finance, Minister Pravin Gordhan, made a serious attempt to balance government’s books.
Gordhan was called back after Minister Nene was removed from his position, by President Zuma early December 2015. The true reason for this politically motivated musical chairs, appointing three ministers in less than 4 days, remains a mystery. Point is Nene was removed and Gordhan had to step in and rescue the cash flow and ensure the country did not face junk status.
It is not unusual for South Africans to live and work overseas for some years, and then at some point, usually after receiving a second nationality, to return to South Africa. Many of these persons returning to South Africa wish to bring their household goods back with them. The SA Customs and Excise Act makes provision for a concession that allows such persons to import goods without having to pay import duties and VAT.
Unfortunately, many persons encounter hiccups with the process, and Breytenbachs Advisory are aware of persons who have been kept in custody at Customs for days due to non-compliance to the prescribed process. We have subsequently provided some answers to South Africans’ frequently asked question on the import of household goods to South Africa.
Who qualifies for the concession on the import of household goods to South Africa? Read More
The South African Revenue Service (SARS) has announced an amnesty of sort – a threat and upfront warnings: we do know about you, best you come forward before we make the tax audit into your affairs known.
On July 9th, 2015, SARS issued a press release, which can be read in more detail on:
http://www.sars.gov.za/Media/MediaReleases/Pages/9-July-2015 – – – South-Africans-with-accounts-and-investments-in-foreign-tax-jurisdictions.aspx
The International Consortium of Investigative Journalists (ICIJ), based information obtained by French newspaper Le Monde, ranked South Africa number 31 among the countries with the largest amount of dollars ($2.3blion) in the so-called leaked Swiss Read More
So, in 2008, whilst on the rise, Minister Nene went crashing to the floor. (See Video Below.) Now, he is on top of it, in fact he was handed a poisonous chalice and survived. In fact, he survived so well he had some goodies to share with Expat South Africans.
Yes, one has to compliment the new Minister of Finance on his performance. Minister Nene, at times, had to force his fellow politicians to enjoy the tax lecture and austerity and budget cuts. Increasing the tax on sinners, smokers, gamblers and other naughty taxpayer did not help to make him too popular.
But the tablets were handed out, the jabs will follow later. The patient is indeed not yet able to leave the hospital. Increasing VAT to 15% would have ensured a cure but once Read More
In South Africa, the South African Revenue Service (SARS the local equivalent of the IRS) has just issued a draft public notice for comment and it refers to strange new terminology, not always correctly understood by the non-American resident.
Most US expats and failed SA expats returning from the USA with a green card in the back pocket, are all facing being caught red handed. Yes, for many years SARS was not the best of gossip queen in the OECD. The cam the Krok case and SARS received some interesting info from the ATO. Not only did SARS wake up to the word FOUNDATION they also saw the benefit of acting in “cohort” with another tax authority.
Suddenly the effort to make FATCA happen for FFI’s in South Africa, became an interesting Read More
Exchange Control is the bugbear of every South African residing outside SA or even for those in SA wishing to internationalize their business or investment portfolio.
South Africans have seen a gradual ease of exchange control rules and although most transactions remain under “surveillance” the ease of transfer and tracking have been made substantially easier of the last few years.
Tucked away with Finance Minister Pravin Gordhan’s budget address was a small note in section W3 suggesting he will make it easier for SA pensioners living abroad.
Pensioners living abroad can now extract their monthly pension and retirement annuity income from South Africa (SA) without the need of a tax clearance certificate, despite living Read More