Financial Emigration & Tax Residency

Leaving South Africa

Financial emigration through the Reserve Bank ended on 1 March 2021. You now stop being a South African tax resident when the facts of your life change, and you should tell SARS. The date matters, because it decides when SARS stops taxing your worldwide income. We assist with:

• establishing when you ceased to be resident, including under a double tax agreement;
• the exit tax: on the day before you cease to be resident, you are treated as having sold most of your assets at market value, and capital gains tax follows (South African fixed property and retirement funds are excluded, and fixed property is taxed when you sell it);
• retirement annuities and preservation funds, which can be withdrawn once you have been non-resident for three uninterrupted years;
• trusts, loan accounts, companies and property you keep in South Africa;
• tax compliance status to move funds offshore, and the notifications SARS expects;
• South Africans who work abroad but remain resident, and the foreign employment exemption.

Moving to, or back to, South Africa

Once you are resident, South Africa taxes your worldwide income and gains. Planned before you arrive, much of the cost can often be reduced. We advise on:

• when your residence starts, and whether a double tax agreement keeps you resident elsewhere for a time;
• the market value step up on arrival, which generally keeps gains on foreign assets made before you arrived out of South African capital gains tax;
• foreign trusts, companies, pensions and investments you bring with you;
• returning South Africans with undeclared foreign income or assets from years when they were resident, through the Voluntary Disclosure Programme.

Both sides of the move

A move involves two tax systems. We do the South African side ourselves and work alongside tax advisers abroad, including in the United States, France and Monaco, Germany and the Cayman Islands, so both sides are planned together.

We advise on moves between South Africa and the United Kingdom, Australia, New Zealand, the United States, Canada, Ireland, the Netherlands, Germany, Switzerland, France, Monaco, Italy, Portugal, Mauritius, the United Arab Emirates and the Cayman Islands.

Why tax attorneys

SARS can question your residence date years later. Because we are tax attorneys, the team that plans your move is the team that defends it, in an audit, an objection or in court, and the legal advice we give is protected by legal professional privilege.