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
On October 3rd, 2013 the South African Revenue Services (www.sars.gov.za) issued BPR 156 (binding private ruling) which ensure some clarity on the taxation of many expats’ pension funds stuck in South Africa.
An interesting ruling, which may be technically correct but in many ways inadequate, writer felt on first read. Perhaps incorrectly? Let’s consider the outcome and value of the ruling.
Like most SARS rulings, it brings clarity but adds several “however” warnings. Before we address them, allow me to summarize the ruling, with an extract:
SECTION: SECTION 1(1), DEFINITION OF “GROSS INCOME” PARAGRAPHS (a) AND (e)
SUBJECT: PENSION BENEFITS ACCRUING TO A NON-RESIDENT FROM A RESIDENT PENSION FUND
This ruling deals with the question as to whether and to what extent a pension annuity and a retirement fund lump sum benefit, received by or accrued to a person who is not a resident of South Africa from a pension fund registered in South Africa, will be taxable in South Africa. Read More