To financially emigrate or not?

[Jopie Fourie]

Subscribing to thread.

I could be wrong but I don't think you have to be out of SA, I've heard some people fly back to SA just to complete the paperwork. There is no way I'm going to pay these jokers a fortune to do something I can do myself.

You do not have to be in SA to do this. A tax practitioner can do this on your behalf. I know a number of people who went this route, but it is very expensive and also take a lot of months and correspondence before the whole process actually gets filed at the bank.

The problem is that many of the documents required, such as share certificates, annual statements, copies of RA agreements, copies of wills, trust deeds, and more... is held at entities who will not release it to third parties. I know there are many delays in this part of the process.

It will actually just be a lot easier if you can do this yourself, or at least obtain all the required documents before you leave the country.

 

[AdrianH]

You do not have to be in SA to do this. A tax practitioner can do this on your behalf. I know a number of people who went this route, but it is very expensive and also take a lot of months and correspondence before the whole process actually gets filed at the bank.

The problem is that many of the documents required, such as share certificates, annual statements, copies of RA agreements, copies of wills, trust deeds, and more... is held at entities who will not release it to third parties. I know there are many delays in this part of the process.

It will actually just be a lot easier if you can do this yourself, or at least obtain all the required documents before you leave the country.

I dub thee ”Master of financial emigration stuff”

I'll start the process beginning of October when my 30 days notice starts, and then I still have November when I am no longer working to finish up.

 

[marco]

All your assets that you leave behind must be reported to the bank and they will instruct the institutions to place them in blocked accounts. Any transactions made on them can only be done by you but all proceeds can only flow via your blocked bank account for SARB surveillance purposed.This

 

[Jopie Fourie]

All your assets that you leave behind must be reported to the bank and they will instruct the institutions to place them in blocked accounts. Any transactions made on them can only be done by you but all proceeds can only flow via your blocked bank account for SARB surveillance purposed.This

If you intend to do financial emigration and break away from SA and/or SARS and the upcoming taxes, obviously you should not have any, any assets left in SA. If you are married and have children, you take them along. You never return to SA for any reason whatsoever. By leaving a bank account, or regularly visiting family members, SARS may declare you a tax resident and still tax you when you earn more than R1m abroad. So, you will have to do a clean breakaway with no assets left in SA.

In addition to this, you may also want to take a look at the DTA of the country you are emigrating to. If they declare you a SA tax resident, you are f***ed too. So, a lot to take into consideration if you want to do this to get away from SA.

 

[AdrianH]

All your assets that you leave behind must be reported to the bank and they will instruct the institutions to place them in blocked accounts. Any transactions made on them can only be done by you but all proceeds can only flow via your blocked bank account for SARB surveillance purposed.This

If you intend to do financial emigration and break away from SA and/or SARS and the upcoming taxes, obviously you should not have any, any assets left in SA. If you are married and have children, you take them along. You never return to SA for any reason whatsoever. By leaving a bank account, or regularly visiting family members, SARS may declare you a tax resident and still tax you when you earn more than R1m abroad. So, you will have to do a clean breakaway with no assets left in SA.

In addition to this, you may also want to take a look at the DTA of the country you are emigrating to. If they declare you a SA tax resident, you are f***ed too. So, a lot to take into consideration if you want to do this to get away from SA.

I want to financially emigrate to cash out my RAs primarily. The only asset I want to leave behind is my rental property (with the bond) and continue to rent it out. I did read previously this is 100% allowed and won't affect my financial emigration, but I will have to submit tax to SARS every year for the income I received on that property and pay appropriate tax on that income.

I will be doing to UK, is that DTA country?

 

[Jopie Fourie]

I want to financially emigrate to cash out my RAs primarily. The only asset I want to leave behind is my rental property (with the bond) and continue to rent it out. I did read previously this is 100% allowed and won't affect my financial emigration, but I will have to submit tax to SARS every year for the income I received on that property and pay appropriate tax on that income.

I will be doing to UK, is that DTA country?

Firstly, yes, you are correct. You can still do your financial emigration and it will not be affected. But, since you do leave a rental property behind, SARS will classify you as a Tax Resident and you will still need to file your annual taxes, declare your rental income, as well as income earned from abroad. Yes, there is a DTA in place with the UK, but it is pretty useless in your case, because you are still a tax resident of SA and you will still be taxed for any amount you earn over R1m abroad too.

 

[AdrianH]

Firstly, yes, you are correct. You can still do your financial emigration and it will not be affected. But, since you do leave a rental property behind, SARS will classify you as a Tax Resident and you will still need to file your annual taxes, declare your rental income, as well as income earned from abroad. Yes, there is a DTA in place with the UK, but it is pretty useless in your case, because you are still a tax resident of SA and you will still be taxed for any amount you earn over R1m abroad too.

In my ignorance, I disagree with the part I will be considered a tax resident of South Africa. I have read articles like below which indicate otherwise.

Misconception 2: You must liquidate all your South African assets

One's asset portfolio can remain the same even once the SARB process is complete. One can still hold, and further contribute, to assets in South Africa and may even gain more assets in South Africa should one wish to.

After financial emigration, only South African sourced income would need to be declared. Once you dispose of all your assets such as bank accounts, properties, trusts, shares and policies, then you can deregister for tax in its entirety, through a formal process with SARS, and then one will not need to submit any tax returns.

4 common myths about financial emigration | Business

There is a lot of misinformation about SA's amended expatriate tax law and the process of financial emigration, says a specialist at Tax Consulting SA.

www.fin24.com

and this

A taxpayer who ceases to be a resident of South Africa will still be liable for income tax on their South African source income, including rental income earned on South African property (subject to certain exclusions), and will be required to continue submitting annual income tax returns despite their non-resident status. Where an individual has declared and paid tax on SA source income, most double tax agreements allow for this SA tax to be claimed as a credit against tax levied on this income in the new country of residence.

SA tax implications of emigrating

South Africans who emigrate need to prove that they are no longer resident in SA if they want to be treated as a non-resident for tax purposes.

www.moneyweb.co.za

 

[Jopie Fourie]

In my ignorance, I disagree with the part I will be considered a tax resident of South Africa.

The impending changes only apply to a person who is a South African tax ‘resident’ working abroad and earning foreign income. Where tax residency is ceased before 1 March 2020, the impending changes will be academic, given that the affected individual will, going forward, only become taxable on income from a South African source or deemed source.

 

[AdrianH]

The impending changes only apply to a person who is a South African tax ‘resident’ working abroad and earning foreign income. Where tax residency is ceased before 1 March 2020, the impending changes will be academic, given that the affected individual will, going forward, only become taxable on income from a South African source or deemed source.

Indeed

I pay tax on income earned in SA such as my income received on rental property. I will declare and submit to SARS annually. I disagree on being an SA tax resident and having to declare foreign earnings though just because I have property in South Africa being rented out.

After financial emigration, only South African sourced income would need to be declared. Once you dispose of all your assets such as bank accounts, properties, trusts, shares and policies, then you can deregister for tax in its entirety, through a formal process with SARS, and then one will not need to submit any tax returns.

A taxpayer who ceases to be a resident of South Africa will still be liable for income tax on their South African source income, including rental income earned on South African property (subject to certain exclusions), and will be required to continue submitting annual income tax returns despite their non-resident status. Where an individual has declared and paid tax on SA source income, most double tax agreements allow for this SA tax to be claimed as a credit against tax levied on this income in the new country of residence.

Are we talking past each other?

 

[cguy]

Indeed

I pay tax on income earned in SA such as my income received on rental property. I will declare and submit to SARS annually. I disagree on being an SA tax resident and having to declare foreign earnings though just because I have property in South Africa being rented out.

Are we talking past each other?

You are correct. Having a property shouldn’t make enough of a difference by itself according to the consultant I used. I also have a property there.

Similarly, you don’t have to never visit either.

I understand that there is paranoia that the government could use any excuse to tap your wealth, but right now, being an “ordinary resident” because of a property you don’t live in and a visit every few years is a real stretch.

 

[Vrotappel]

And how is SARS going to know where someone spends most of their time?

Movement control - home affairs.

 

[reactor_sa]

Movement control - home affairs.

Haha, they don't scan passports at the airport, how are they tracking people?

 

[Speedster]

Haha, they don't scan passports at the airport, how are they tracking people?

When is the last time you went through customs?

 

[reactor_sa]

When is the last time you went through customs?

Average every 3 months the last 18 months, so 6 times the last 18 months. In SA it's just a stamp, in other countries it's usually a scan of your passport probably to store an electronic copy.

Have I not been paying attention? Are they scanning passports now in SA?

 

[Sinbad]

Average every 3 months the last 18 months, so 6 times the last 18 months. In SA it's just a stamp, in other countries it's usually a scan of your passport probably to store an electronic copy.

Have I not been paying attention? Are they scanning passports now in SA?

They have been for years.

I even got out of a massive TV license back payment by requesting my movement data from home affairs and using that as proof I was out of the country from 1999 to 2004.

 

[Speedster]

Average every 3 months the last 18 months, so 6 times the last 18 months. In SA it's just a stamp, in other countries it's usually a scan of your passport probably to store an electronic copy.

Have I not been paying attention? Are they scanning passports now in SA?

They pop your passport through the big brother machine before they stamp you in / out

 

[phiber]

Average every 3 months the last 18 months, so 6 times the last 18 months. In SA it's just a stamp, in other countries it's usually a scan of your passport probably to store an electronic copy.

Have I not been paying attention? Are they scanning passports now in SA?

What airport do you use? Jhb intl always scans my passport. Come back in end of next week, will triple check this, but they have been scanning passports for a while. They even went through a fingerprint phase.

 

[reactor_sa]

What airport do you use? Jhb intl always scans my passport. Come back in end of next week, will triple check this, but they have been scanning passports for a while. They even went through a fingerprint phase.

OR Tambo. Damn, I must be way too tired to notice. Going to check this month.

 

[AdrianH]

When I landed at OR Thambo from Perth at 4:45am in 2016, our passports weren't checked. In fact, I think I only saw two officials on the way to the baggage conveyor.

 

[Speedster]

When I landed at OR Thambo from Perth at 4:45am in 2016, our passports weren't checked. In fact, I think I only saw two officials on the way to the baggage conveyor.

You mean you didn't go through the long winding queue section where they check your temp on the camera while you're approaching and then go too the customs people to scan /stamp your passport?