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Expatriates Living Outside of South Africa – Must Answer These Questions Before Emigrating Financially



Hugo van zyl

Expats living outside SA must first answer the following questions before they agree to emigrate financially:

  1. Provide a family structure and background information on the immediate family, i.e.:
  2. 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?
  3. Your family home in SA:
    • Did you sell or rent it out? If rented out, is it a long-term rental agreement?
  4. 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:

  1. Will this be the same for you, travelling all by yourself on a business trip?
  2. Where do you live? Country, Province/State and City
    • Rental property or owned by the family, directly or indirectly via a family trust?
  3. Did you avail to an investor visa, e. deposited some funds with the foreign government or bought/rented a qualifying property (Malta, Golden Visa etc.?)
    • If so; how long ago and have you spent substantial time in the said property?
    • If not, explain your intention with the property or investment?
  4. Where were your born and how long did you sta in SA?
    • Provide some information on the passports ou held?
    • If not born in SA, when did you arrive in SA?
      • Wht was the reason for coming to SA?
    • What was the reason for leaving? Job, secondment or a family decision to find a new home country?
  5. Can I avail to tax treaties and be considered tax resident in my new home, as this is not subject to financial emigration?
    • If yes, on what date was the tax exit?
    • Do you pay income tax, in the new home country on sourced income only or worldwide income?
    • Have you ever obtained a tax residency certificate from the new county’s tax authority?
  6. Can I claim tax credits in SA, as I have paid the necessary tax in the country of employment?
    • Most countries, apart from the UAE, has the ability and intention to tax you on locally sourced income. Yes, even “tax havens” such as the Channel Islands do charge a personal tax on remuneration earned by employees residing in their country
  7. It could be that your employer is paying on your behalf, do ask the HR department
    • If you are not in a treaty country, can I tax emigrate based on facts and intention?
    • Could the FE option be part of the building blocks to show the intention to exit South Africa and the SARS tax system as ordinarily tax resident?
    • If so, was the tax exit date this year or sometime in the future?
  8. Why would you consider or wish the complete the FE process? Here are some reasons:
    • To cash out a retirement annuity
    • To be able to re-invest into SA via my offshore trust or non-SA company to ensure I am not exposed to SA estate duty
    • To exit large funds (more than R20m per family) sourced from past savings or huge inheritance?
  9. Why do you think do service providers place so much emphasis on FE, insisting I incur the huge costs?
    • Should I not obtain a formal tax opinion from a person not selling FE to one and all, but only to persons that could show a clear benefit?
    • Did you pay your exit tax (CGT in terms on section 9H of the SA Income Tax Act)? If so: in which tax year?
  10. Do you need to transfer funds from ZA Rand to foreign currency and vice versa?
    • Provide some additional information as to the reason, monetary value and the life events that may impact on this, e. sale of a house or parents being supported from abroad, passing on
  11. Where do you intend to retire? Back in SA?
    • Irrespective of retirement plans, do you intend to return SA at any given time?
      • Timelines and life events that catapult you into making this decision?

Once you have considered all of the questions above, contact

Hugi van Zyl for more guidance.

 

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Hugo is a Chartered Accountant (South Africa) registered with The SA Institute of Tax Practitioners and SARS as a Master Tax Practitioner. He is in daily contact with expat South Africans (aka SAFFAS or Wegkaners) where ever they live and has lectured from LA to London and although many clients now reside in Australasia, Hugo has never visited either Australia nor NZ. Bucket List I hear you say. Hugo is also a Trust and Estate Practitioner (STEP). Cross border taxation and Exchange Control are both high on his priority, be it for emigrants, immigrants or multi-nationals.

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