The choice of whether or not to move abroad is obviously a deeply personal one. You may find yourself in this predicament, wondering whether you should pack up and leave South Africa to seek out a new life and better opportunities abroad. Or perhaps you’ve already made the decision – merely finalising the emigration process, or already living abroad.
We’ve discussed financial emigration and fund transfers in some length in the past few months, but not everyone understands tax clearance and how it works. Unfortunately, most South Africans get a bitter taste in their mouths when the subject of tax arises, but in most cases if you want to move your money abroad, you will inevitably have to deal with SARS.
Many South Africans living abroad aren’t aware of their rights and the possible tax relief available to them if South Africa has a Double Tax Agreement (DTA) in place with their new country of residence. If you are one of those individuals, then listen up as we give you the low-down.
Finances are always top of mind when you’re immigrating, unless you’re in the lucky position of moving to a country with a weaker currency than the one you’re currently residing in. But any move is expensive and it’s helpful to have some tips under your belt for saving money before, during or after your big move. Here are a few ideas which will help you stretch your money a bit further.
The economic world is in flux! Not only have we borne witness to a myriad of economic shakeups on South African soil, but we’ve seen a fair share of global challenges in the financial sector over the past few months; from Chinese stock market turbulence to widespread credit rating hurdles, Brexit, interest rate fluctuations and, of course, the Panama Papers.
Earlier this year the world was shocked by the Panama Papers which were leaked to the International Consortium of Investigative Journalists (ICIJ). These papers contained confidential information with in-depth transactional information (11.5 million files) over a span of nearly 40 years. It listed approximately 15 600 paper companies established for the sole purpose of keeping individual financial affairs under wraps.
With the recent increase in the annual foreign investment allowance it’s now possible for a married couple, whose tax affairs are in order, to transfer R22M out of South Africa each calendar year. The foreign investment allowance has increased from R4M to R10M and the discretionary allowance remains at R1M, but there are now no sub-categories; the funds can be used for “any legal purpose”. There is no restriction over the movement of money between spouses.
There are no practise runs for life, no rehearsals, so when you have a dream that you want to follow there’s no time like the present. It’s why increasing numbers of people are moving abroad, and starting an exciting new life that allows them to make the most of their skills and talents.
More than 500 South Africans were among the 100 000 individuals ousted by the International Consortium of Investigative Journalists in February 2015 for stashing away more than R1,1-trillion at HSBC in Switzerland. Though it is not against South African law to hold a Swiss Bank account, it is believed that some accountholders have used these accounts to dodge international tax obligations.
When most people think of tax, the feeling is a resounding cringe which creeps down to the pit of their stomachs. In truth, few people understand tax, and even less have a positive view of it. In essence, though, the tax man is not out to get you – and in theory the tax you pay on goods and services each day is used to build schools, provide essential services and uplift local communities.
Tax return season commenced on 1st July, and so people across SA and South African expats living abroad are seeking South African tax services regarding how to file their individual tax return and what they can claim. They may not be aware, however, that they could also benefit from advice on how to keep their personal and financial information safe from the clutches of hackers and phishers. By following our timely tax advice below, you can keep your details safe from prying eyes.
Proposed tax reforms relative to South African trusts are significant, to say the least. If you live overseas and are a trust beneficiary or donor it’s important to keep your ear to the ground and remain fully informed.