SA Tax Emigration

Financial emigration died a very timely death on 28 February 2021 –

Tax Emigration is it’s nasty sister and comes with a whole new set of rules.

 

The new process kicks off with completing and submitting an Emigration Tax Compliance Request (TCR01) application to SARS. That’s the (almost) easy part!

 

That application is followed by a request from SARS for information and supporting documentation. The more complex your SA life is, the more documentation they want from you. It’s a very comprehensive list so please contact us if you would like a copy of that. Apart from current value statements for all taxable assets, they also want original contracts so it’s best to gather all this paperwork before you even start the application process.

 

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! If the thought of dealing with SARS is one you would rather avoid then give us a call to discuss whether you should or shouldn’t tax emigrate and what the impact will be for you both in SA and the UK.