Emigration and movable assets in ZA

[Merlin]

Hi, everyone,

I am lined up for emigration to the UK in the foreseeable future.

This has been a long-term goal, so life has been structured around it for years, to facilitate an easier move as and when.

I live in Cape Town, in a fully furnished flat and have a couple motorcycles to my name. The motorcycles will be sold closer to the time and I will literally walk out of my flat here with a bag of clothing and perhaps one box of personal effects. Anything else will be given away as it's not worthwhile taking with me.

The situation is not as simple as that though, as I also have a life on the side of the country...

I have a large collection of antiques and several classic vehicles to my name. This is all securely stored with family and I have the option to continue doing so for at least a couple more years.

I own no property.

My finances are distributed amongst the money market, a TFSA account and in taxable shares. The intention is to pull all of these sources and move it to the UK once I have a bank account on that side. That's a thread for another day.

I will either retain my ZA bank account or gain POA to a relative's account, for the purposes of covering the costs related to my vehicles, etc.

The idea is to move across essentially as a backpacker, giving myself the freedom to move around for the first 6-12 months (I will be working remotely) to suss out which area I'd like to setup in. Once the dust settles, I'll look to move my assets across.

Given that I want to cease being a tax resident here ASAP (@#$% SARS and the ANC), what, if anything, is the implication of this given the vehicles registered in my name?

Thank you.

 

[Sinbad]

With regards to bank accounts - if you bank with FNB you can open a channel islands account from SA - and you can use that as a mostly-functional UK account when you land as well, including having a debit card. They do money market as well.

Tax residence is a pretty subjective thing. I don't think having assets in your name in ZA is a dealbreaker, provided you can give enough evidence that you're actually normally resident in the UK. Bank account is definitely not a stumbling block, I still have my FNB account open there.
If you are worried about the cars, then transfer ownership to a trusted family member?

 

[Merlin]

Thanks, Sinbad.

Good tip there, re: the FNB account. As far as I know, they are still tied to ZA though, so I think I'll hold off until I land and open an account with a British bank ASAP.

Registering the vehicles in a relative's name is an option, if it comes to that.

 

[Sinbad]

Thanks, Sinbad.

Good tip there, re: the FNB account. As far as I know, they are still tied to ZA though, so I think I'll hold off until I land and open an account with a British bank ASAP.

Registering the vehicles in a relative's name is an option, if it comes to that.

What do you mean by still tied to ZA?
Note, opening an account with a british bank can be problematic if you don't have proof of address. People have had varying degrees of success with Monzo or Starling, but the most reliable seems to be Lloyds as they will verify your address by posting you a password, rather than relying on you providing an existing proof.

 

[Merlin]

My understanding is that ultimately the FNB CI account is still party to ZA regulations and governance.

As my intention is emigration, I'd prefer to move my life wholly to the UK.

My employer is still working out the details pertaining to me moving over, so things are rather fuzzy at present. I will certainly have access to some fixed address in the coming months.

 

[Sinbad]

My understanding is that ultimately the FNB CI account is still party to ZA regulations and governance.

As my intention is emigration, I'd prefer to move my life wholly to the UK.

My employer is still working out the details pertaining to me moving over, so things are rather fuzzy at present. I will certainly have access to some fixed address in the coming months.

Oh yeah sure. I meant as an interim measure...

 

[Snyper564]

Simple

The day you cease to be a SA tax resident EVERYTHING YOU OWN no matter the location will simply be deemed to be "sold" at market value and you will pay CGT on that.

This means in theory that your car will still be here and still in your name but you would have paid the "exit tax" on it.

Just look at the CGT guide as you might get away with one car as a personal use asset but multiple collectors ones are another story.

 

[Merlin]

Simple

The day you cease to be a SA tax resident EVERYTHING YOU OWN no matter the location will simply be deemed to be "sold" at market value and you will pay CGT on that.

This means in theory that your car will still be here and still in your name but you would have paid the "exit tax" on it.

Thanks, Snyper.

 

[Snyper564]

Thanks, Snyper.

I added this edt after the initial post Just look at the CGT guide as you might get away with one car as a personal use asset but multiple collectors ones are another story. Personal use assets might even fall away when residency is ceased best to get a decent tax consultant if the amounts are significant.

Can also sell bit by bit to make use of your annual allowance. Till you pull the "cease residency triggeR"

Its been a while since I looked at this stuff

 

[Merlin]

I added this edt after the initial post Just look at the CGT guide as you might get away with one car as a personal use asset but multiple collectors ones are another story. Personal use assets might even fall away when residency is ceased best to get a decent tax consultant if the amounts are significant.

Can also sell bit by bit to make use of your annual allowance. Till you pull the "cease residency triggeR"

Its been a while since I looked at this stuff

Thanks, Snyper.

At present, there is no intention of selling them. I have a few years to play with before I'm pushed into the position of having to decide whether I sell/move some/all of them.

My life in the UK will be largely mobile for at least the first few years.

 

[JacD]

What has been said previously is correct, financial emigration does not mean you may not own assets in RSA. You do however not give up any tax liability relating to any RSA income. So worldwide income is no longer considered, only RSA. Assets as said, triggers CGT on exit date, so day you fly out.

 

[Merlin]

Thanks, Jacques.

That's perfect.

 

[Corelli]

I would be be

Hi, everyone,

I am lined up for emigration to the UK in the foreseeable future.

This has been a long-term goal, so life has been structured around it for years, to facilitate an easier move as and when.

I live in Cape Town, in a fully furnished flat and have a couple motorcycles to my name. The motorcycles will be sold closer to the time and I will literally walk out of my flat here with a bag of clothing and perhaps one box of personal effects. Anything else will be given away as it's not worthwhile taking with me.

The situation is not as simple as that though, as I also have a life on the side of the country...

I have a large collection of antiques and several classic vehicles to my name. This is all securely stored with family and I have the option to continue doing so for at least a couple more years.

I own no property.

My finances are distributed amongst the money market, a TFSA account and in taxable shares. The intention is to pull all of these sources and move it to the UK once I have a bank account on that side. That's a thread for another day.

I will either retain my ZA bank account or gain POA to a relative's account, for the purposes of covering the costs related to my vehicles, etc.

The idea is to move across essentially as a backpacker, giving myself the freedom to move around for the first 6-12 months (I will be working remotely) to suss out which area I'd like to setup in. Once the dust settles, I'll look to move my assets across.

Given that I want to cease being a tax resident here ASAP (@#$% SARS and the ANC), what, if anything, is the implication of this given the vehicles registered in my name?

Thank you.

Honestly. If you are single without kids. I would look at Singapore. You can get PR in 2 years and Citizenship in 4 years, and if you then start a family, well school fees are $5 a year, and you can get one of those HDB apartments for not much either.

Option 2 maybe Australia, but its getting worse. I know a lot that wants to move out. All complain about crime thats gone up, overpriced housing, tax benefits dissapearring and the wrong type of refugees. Let alone mines closing and now well also not the best people there, thats now jobless.

Option 3 would be Dubai. Sure you may need better aircon, but 0% income Tax and 0% property tax. A few friends are there, and other than the heat, they are quite happy actually.

Option B or C dating and marrying a Japanese or Korean (Although Japan is the better option here). Sorry to the Koreans but generally Korea is quite cold - socially.

As for the antiques. Ship it with you, dont leave it here. Also they would carry more value abroad than locally. The market locally is quite small, and its getting smaller. So decide if it's worth it for you or not. I have crates full in storage that I will move abroad with me. Probs going Bali side, but more inland not Kuta or Nusa Dua.

 

[Corelli]

What has been said previously is correct, financial emigration does not mean you may not own assets in RSA. You do however not give up any tax liability relating to any RSA income. So worldwide income is no longer considered, only RSA. Assets as said, triggers CGT on exit date, so day you fly out.

Do remember we have a double taxation system as do some other countries. I am not sure exactly how it works but I know America follows a similar path, and if you are a spouse, and may never ever have stayed in the US, you may still have to pay money to the IRS because you're married to one. One of my friend got a shock of her life when the IRS sent her an please-pay-us-because-youre-married-to-an-american-with-priveledges.... acccount.

 

[Merlin]

I have a UK employer seeking to sponsor me. I don't qualify on points elsewhere, unfortunately.

This is the culmination of years of hard work.

I am single. No kids.

I have no intention of letting my antiques collection or vehicles go at this point. I have a very different lifestyle planned for the UK, a mobile one, so my collection will remain here for a few years until such time as I am established on that side and have somewhere suitable to house it.

 

[smc]

If you apply to SARS to become non-tax resident, they will explicitly ask whether you have any belongings in storage in South Africa. If you do, unless you have a very good explanation, they will deny your application on the basis that having belongings in storage indicates that you still have ties to the country and possibly intend to return.

 

[Merlin]

If you apply to SARS to become non-tax resident, they will explicitly ask whether you have any belongings in storage in South Africa. If you do, unless you have a very good explanation, they will deny your application on the basis that having belongings in storage indicates that you still have ties to the country and possibly intend to return.

Thanks for the tip.

Given that I've spent the best part of two decades trying to escape this delightful government, I definitely do not intend on returning.
I will justify my reasons for retaining personal possessions here for a limited amount of time; namely available storage on that side and trying to rebuild earnings thanks to the pitiful exchange rate at their hands.

 

[JayM]

With regards to bank accounts - if you bank with FNB you can open a channel islands account from SA - and you can use that as a mostly-functional UK account when you land as well, including having a debit card. They do money market as well.

Tax residence is a pretty subjective thing. I don't think having assets in your name in ZA is a dealbreaker, provided you can give enough evidence that you're actually normally resident in the UK. Bank account is definitely not a stumbling block, I still have my FNB account open there.
If you are worried about the cars, then transfer ownership to a trusted family member?

Did you change your SA account to a non-resident one? If not, how what do you do for FICA?

 

[Sinbad]

What has been said previously is correct, financial emigration does not mean you may not own assets in RSA. You do however not give up any tax liability relating to any RSA income. So worldwide income is no longer considered, only RSA. Assets as said, triggers CGT on exit date, so day you fly out.

There's no such thing as financial emigration.

 

[Sinbad]

Did you change your SA account to a non-resident one? If not, how what do you do for FICA?

Nope I didn't. AFAIK that is a financial emigration thing which isn't relevant any more? And only useful if you have millions in it you want to transfer out?