As noted in previous blog posts, SARS has now finalised the new Tax Emigration process, effective 1 March 2021.
That’s great news for those of us working within these processes but it’s also good news for emigrant taxpayers. Put simply, the process is now simpler and faster.
In order to Tax Emigrate now, you have to complete and submit a Tax Compliance Request (TCR01) application to SARS. There’s a comprehensive list of requirements that go with this. These can be obtained from the SARS website. If you search for SARS TCR01 you will find the, somewhat daunting, list which I certainly have no intention of reproducing here. The end of the process will be SARS issuing you a Tax Clearance Status (TCS) PIN letter.
Perhaps more importantly is how much you can take out of SA once you have Tax Emigrated.
In the year of your migration you can take:
R1 million with no questions asked, and
R10 million subject to a valid TCS PIN letter issued by SARS
More than R10 million if you successfully make an application to the SARB for the excess amount
Thereafter, you can still take the R10 million + provided you keep renewing your TCS PIN
As far as your bank account is concerned:
Your residential status will change from South African resident to non-tax resident.
New capital and income accounts will be opened to separate income and capital.
Income is freely remittable out of South Africa, while capital is subject to the allowances discussed above.
Your overdraft limit on your personal account will be reduced to zero although you can request to retain the existing limit.
Financial Surveillance requirements relating to credit limits and residential home loans will apply.
Any SA credit card you have will be blocked for any foreign expenditure.
Should you not want to go through the tax emigration process, your Personal Bank Account will remain designated as a South African resident account even if you are living abroad.
If you are already a non-resident for tax purposes, you will still have to follow this process with SARS to prove your tax status.
As with all things SARS, you CAN go through this process on your own or you can use your South African Tax Practitioner. Alternatively, you can give us a call to discuss whether you should or shouldn’t and what the impact will be for you both in SA and the UK. You can get us on email@example.com or +44 2045 242850