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Seema says: 8 February 2021 at 11:16 Hi TaxTim, please can I ask about emigration and Retirement Annuities (RA)? The new South African tax regulation, effective March 1, regarding emigrants' RAs being frozen for 3 years after financially emigrating: 1. I was told the start of the 3 years is not from date of financially emigrating, but rather the declaration date of non-tax resident status, is this correct? 2. If so, how does one declare oneself a non-tax resident? 3. I may have already declared myself a non-tax resident but am uncertain, how would I check my tax status to be sure? I am no longer in the country so I cannot call SARS. I am undergoing the financial emigration process with Sable International to withdraw my RA (hopefully before March reg) but they said the process does not include the declaration and also would not answer the questions above, which is strange. |
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TaxTim says: 10 February 2021 at 10:39 1. The 3 year rule has only just been signed into law, so unfortunately it is not possible at this stage to explain exactly how it will work in practice. The Taxation Laws Amendments Bill states that from 1 March 2021, instead of financial emigration being the requirement for the payment of retirement annuity and preservation lumpsums, there will be a new test which allows for these lump sum benefits to be paid when a member ceases to be a South African tax resident (as defined in the Act), and such member has remained non-tax resident for three consecutive years or longer. The tax residency rules would be applied to determine when the tax residency ceased i.e. both the Ordinary residency test and physical presence test as well as any Double Taxation Treaty Agreements (if applicable) would be considered. Exactly how the taxpayer is required to prove non-residency status is unclear at this stage. 2. You can declare your non-tax residency via your annual tax return on SARS eFiling. There is a question in the opening wizard that asks if you are a South African tax resident. You can select No in there and insert the date you became non-resident and this will then update your status on the SARS internal system. It would seem logical that this would be used to indicate the start of the 3 year period, however it has not been explicitly stated by Treasury at this stage. 3. You can check your previous tax returns to see if you ticked that block mentioned in 2. You can also email SARS at contactus(at)sars.gov.za to check your tax status with them. Please add your full name and surname, ID number, Tax number and last SA address for verification purposes. |
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