Purchasing a House immigration vs emigration

[EuropeanGirl]

Hello, I am planning to buy a house in South Africa with European money. The sellers are emigrating to UK. Can I pay them in pounds? I would still pay the transfer fees etc here in Rand.

 

[RedViking]

What did the owner say?

 

[Arthur]

How and where you pay is between you and the selller. Paying them in sterling in the UK doesn't change their obligation to comply with SA tax and forex laws - that's their business, not yours.

 

[Steamy Tom]

imo you pay the conveyance attorneys, you DO NOT pay the owner!!

 

[bwana]

Hello, I am planning to buy a house in South Africa with European money. The sellers are emigrating to UK. Can I pay them in pounds? I would still pay the transfer fees etc here in Rand.

I paid for my house in GBP.

 

[Milano]

If you mean paying the seller in GBP in the UK then I would be surprised if SARS or the SARB would be okay with that. There are CGT factors involved that may or may not apply in this specific case but would apply generally. If you just think of the forex implications. That money is expected in SA. If it never enters SA then it would surely be seen as some type of avoidance or circumvention of forex regulations as the seller would have bypassed laws in place to cap their annual allowance.

 

[Arthur]

If you mean paying the seller in GBP in the UK then I would be surprised if SARS or the SARB would be okay with that. There are CGT factors involved that may or may not apply in this specific case but would apply generally. If you just think of the forex implications. That money is expected in SA. If it never enters SA then it would surely be seen as some type of avoidance or circumvention of forex regulations as the seller would have bypassed laws in place to cap their annual allowance.

Where the seller receives the money is irrelevant to CGT. If the seller is liable for CGT then the seller must pay it - has nothing to do with where the money is. The seller just needs to ensure she complies with SARB forex regs, and that the funds are legally expatriated. Remember, for an SA tax resident title to the money passes in SA irrespective of where the bank accounts are held. All they must do is disclose and pay tax as the law requires.

 

[Milano]

Where the seller receives the money is irrelevant to CGT. If the seller is liable for CGT then the seller must pay it - has nothing to do with where the money is.

Without knowing the overall assets of the seller then it is impossible to know whether the seller has any further funds in SA in order to settle any potential CGT obligations. Assuming the seller has no further funds in SA it would then be considerably more difficult for SARS to get the funds from the UK than from funds already in SA. I would be very surprised if SARS left such a loophole wide open like that.

Same applies with SARB. Not sure if the OP holds SA citizenship. As an SA citizen she might be expected to be fully aware of SA law, and her actions may potentially make her party to any transgressions. Perhaps either way.

Furthermore, I am not sure whether she is only looking at acting in her own interests or perhaps might even be considering the interests of the seller in terms of the seller potentially not fully understanding the repercussions of his/her actions.

There is a certain amount of free advice that SA banks and conveyancers might offer but ultimately a practicing SA attorney might be best to answer these questions to avoid potentially acting contrary to any SARS/SARB legislation.

 

[Milano]

Remember, for an SA tax resident title to the money passes in SA irrespective of where the bank accounts are held. All they must do is disclose and pay tax as the law requires.

That would be more clear cut in a case in which the SA tax resident's property is situated outside SA. Where the property is in SA, I would still suggest she seeks qualified advice from a practicing professional within the applicable sector. Plus there is still the matter of why she would be paying the seller directly instead of a conveyancer which potentially raises red flags in other areas.