Living abroad is one thing.
Ending South African tax residency is another.

Previously, financial emigration meant formally changing your status with the South African Reserve Bank. That process has been abolished.

Now, financial emigration means ceasing your South African tax residency with SARS, either because you no longer ordinarily reside in South Africa or because a double tax agreement makes you tax resident in Australia (for example).

It’s a once-off change of status that doesn’t expire, and the onus is on the taxpayer to inform SARS of this cessation.

If you’ve moved abroad permanently, SARS may still regard you as tax resident until you formally cease residency.

Until such time you denote yourself as Non resident, SARS would still expect you to lodge returns to declare worldwide income, including your Australian employment income.

Denoting yourself as Non resident means you declare only SA-source income, and it can enable access to your retirement savings and the transfer of your wealth offshore.

Yes. Once you’ve been non-SA tax resident for at least three consecutive years, you can avail of what is called a Cessation (of tax residency) withdrawal to access your full retirement annuity and/or preservation fund holding as a lump sum, and transfer the proceeds to Australia.

If you’ve decided to make Australia your permanent home, you may want to align your asset base there.

Generally South African Retirement funds can be an important part of this process, therefore a key consideration is how best to externalise them and put the proceeds to work to build your retirement base in Australia.

Encashing your South African Retirement funds and investing the proceeds in Australia (through Superannuation, or discretionary investments) will mitigate the risk of Rand depreciation, and will help you avoid a mismatched core exposure to South African risk-assets.

Retirement fund encashment is more complicated than simply selling down a discretionary investment, and often it will require you to cease tax residency and support the fact that you have been Non-SA resident for three years to avail of a full lump sum withdrawal.

Once encashed via this process, there aren’t any restrictions on what you use this money for in Australia.

So while some make Concessional and/or Non concessional contributions to their Superannation fund, others opt to use the proceeds to set up discretionary investments or enter the Australian property market.

MyGlobalCFO brings a very unique combination of Forex, Tax, Exchange control and Retirement fund encashment expertise which we tailor to your specific Australian migration needs.

We are one of the only (if not the only) financial emigration providers in existence that is a registered financial services provider in both South Africa and Australia.

We can therefore partner with you to provide holistic expertise that is relevant to your new life in Australia while other providers may focus on only one or two pieces of the puzzle.

With over a decade of experience in Retirement fund encashment, we have very good working relationships with all the big policy providers to bridge the gap between the tax process of ceasing residency to facilitating the actual Retirement fund encashments on your behalf – and remitting the proceeds to Australia for onward investment.

No. Ceasing tax residency is a tax matter, and does not impact your eligibility to remain a citizen.

You can keep your South African citizenship and your South African passport.

If you later decide to return to South Africa permanently, you will likely become tax resident again.

You don’t necessarily have to sell all your South African assets, and you don’t necessarily need to close out all South African bank accounts.

You can keep South African property and investments, and you can still hold a South African bank account, which you would denote as a non-resident one.

Only on South African-source income, such as rental income.

Your Australian employment income is no longer taxed in South Africa.

You may still need to file South African tax returns if you earn local income or own local assets, but once you have wound down your SA asset base you may then be able to deregister your income tax type.

Also known as a ‘Deemed disposal for CGT purposes’, this may apply when an individual ceases to be a tax resident

Governed by Section 9H of the Income Tax Act, a deemed disposal of certain worldwide assets may be triggered upon cessation of your residency – even though no actual sale takes place.

This is deemed to take place the day before your change in status, and is based on the market value of certain asset classes as if they were disposed of on that day – and can result in a CGT liability to SARS

SARS would generally lose taxing rights over future capital gains pertaining to the relevant asset, which is then taxed in your new country of residence.