SA tax residency status

[Bob123]

I have lived in Oz since 2008 (PR since 2016) and until last year I have done my SA taxes as SA tax residence in both countries, i.e I declared my foreign income in SA.  I sold my home in SA in 2015 and bought a house in Oz.  Currently I have a rental property, pension and RA's in SA.   Since my primary residence is outside SA, visited SA only for holiday in the last 10 years (two weeks per year) and I have no intention of returning 

 

1. Am I still a tax resident in SA?

2. Do I still have to declare my foreign income and foreign capital gains in SA or do I only declare my SA based rental income?

3. How do I let SARS know I am not a SA tax resident anymore, i.e. how do I change my tax residency status

 

I am planning to leave my pension and RA's in SA, so I do not see the reason to financially emigrate

 

I actually visited SARS in Randburg and they were clueless

 

 

[Hugo2]

Good morning

 

You PROBABLY remained tax resident in SA until you obtained PRP status in Oz - the treaty makes it clear work permit holders can't tax emigrate from SA

 

Our tax law in SA states that the day before you became treaty-based tx resident in Oz, you are deemed to have tax emigrated from SA and as said work permit holders in Oz,  normally can't tax emigrate (exception if for example, you married to an Australian).

 

Once you had PRP status treaty tie breakers became relevant and the centre of vital interest probably favoured Oz, but the sale of your family home clearly finalised the tax exit from SA.

 

On your 2017 tax return there is a question: did you tax emigrate and you need to say yes. 

If you sold your SA house post-PRP, your attorney should have withheld CGT unless SARS gave specific permission not to, as you lost your default primary residence exemption. On NR02 or IT12 you can indeed claim proportional primary residence exemption. If the attorney filed NR01 and NR02, correctly (and if they did not, the penalty is huge), SARS would also be aware of the tax exit. In your case, you sold while still SA tax resident and the sale should have been filed in the 2016 I12.

 

Post-tax exist you only need to report SA sourced income and if you do qualify, you can claim the exemption.  On retirement lump sum you will always pay SA tax but note that ATO will also tax proportional and should allow credit for SARS tax. 

 

On tax exit, you need to pay CGT on your worldwide assets as if you sold the assets at market value. Excluded are SA immovable property, retirement fund and certain personal assets

 

Need more....www.taxmigration.com or inbox me

 

Edited September 10, 2018 by Hugo2
grammar