Christmas is JUST around the corner with this year being a victim of Covid – the world’s economies have been coughing and spluttering with repeated lockdowns whilst the stock markets seem to have lost their sense of smell reaching ever increasing heights when economic reality dictates they should be at MUCH lower levels.
But, the year is done and January is just around the corner. Whether you are in SA or the UK that means there are a few important deadlines looming.
In SA all individual provisional taxpayers must have their 2019/20 income tax returns submitted and in the UK all 2019/20 returns must be submitted and final tax payments need to be made.
The end of February 2021 then brings BIG changes to rules around financial emigration for South Africans. At this stage there remains a lot of uncertainty about those rules and the implementation of the new rules but what IS certain is that any SARB/SARS emigration application submitted from 1 March 2021 onwards will ensure that RA and Preservation Fund withdrawals will be locked in for at least 3 more years.
SARS has successfully ignored/overridden pleas from all the major insurers and professional societies to NOT implement these new rules but they are adamant that the new regime is being rolled out. I must admit to finding that a little surprising as it must be a great source of revenue for SARS with early withdrawals being subject to fairly hefty tax charges. Clearly these would go some way to alleviating the massive revenue collection shortfalls that appear to be looming but perhaps preservation of that “capital” is more important to SA than the taxes it’s withdrawal would generate.
For those planning on emigrating next year this can create a few problems. Obviously, one of those is funding the costs of emigration and settlement in your new land of residence. Historically, many people have used their retirement funds to facilitate the overseas move and make the landing in their new country a little less painful. From 1 March 2021 that benefit disappears!
There is, potentially, a bigger problem for those folk though. As soon as SARS know someone has left they trigger a deemed Capital Gains Tax calculation on the worldwide assets of the victim. For those that haven’t actually sold any of those assets the negative cash flow implications can be enormous. When that’s added to the cost of moving, the difficulty of finding employment in your new land and the (now) unavailability of those retirement funds, the timing of your “official” emigration requires careful planning.
If you are looking for advice and/or help we would love the opportunity to partner with you as you step through the eggshells of your migration. Give us a call (on +44 7511 540 881) or send an email to firstname.lastname@example.org and we will get back to you very quickly.