SARS - Closing account & a few other questions

[Eagle101]

We are on PR but have not formally emigrated, but are now giving it some more thought - essentially SARS driven.  (In process of applying for AU citizenship, but first applied to RSA to keep RSA citizenship).

 

Is the only way of closing ours SARS tax accounts  by going the path of Formal (Financial) emigration through the Reserve Bank?

(If so, then seems like this is the only way of really protecting oneself from possible tax law changes that may have implications further down the road)

 

A related aspect that has me a bit concerned is the possible future tax implications for our children.  Even though they wont have SARS tax numbers, unless we have formally closed all ties with SARS,  who know what the implications could be in the future shoud laws be passed etc, i.e. our children could be in breach of the RSA Tax laws for years and years, and never even know....)

 

From the 2017 SARS tax return, they now include a question about if you ceassed to be a Resident of RSA during the year:

If a person answers YES, does this question trigger the CGT liability on deemed sales,  or is that only CGT liability only triggerred when a person formally emigtrates (which I assume to be the case)? 

 

What about if a person ceased to be a RSA Resident many years ago (before 2017, when this question was added)?

I wrote & hand  delivered a letter to SARS stating that we were indefinately re-locating to AU, and in terms of the double taxation agreement between AU & RSA, were now regarded as AU Tax residents, therefore we are no longer RSA Tax Residents.

 I did not fill in a specific form, and as mentioned, it was never before been asked on a SARS tax form prior to 2017 - Would that be fine? (I included copies of our PR Visa's ATO TAx registration, new contact details like address & phone numbers etc) and got SARS to stamp my copy.

 

Each year I still submit a SARS tax return, only including interest earned on a few Rand in a RSA bank account (only a few hundred rand interest - no other income or assets in RSA) - The website seems a bit unclear (as they say if you hold funds / assets worth > R225,000 you need to submit, but that would be for RSA Tax residents - they do not seem to address the situation if you are a NON RSA tax resident).  Do I in fact need to keep submitting these RSA tax returns each year?  (I am just concerned if I stop, and in a few years time I log into EFiling to check, that EFiling auto generates all these tax returns, and therefore shows then as overdue and not submitted....) 

 

 

Thanks - Any comments would  be appreciated.

 

 

Edited September 20, 2018 by Eagle101

[Hugo2]

4 hours ago, Eagle101 said:

We are on PR but have not formally emigrated, but are now giving it some more thought - essentially SARS driven.  (In process of applying for AU citizenship, but first applied to RSA to keep RSA citizenship).

HVZ: Formal emigration does not resolve SARS issues, it brings certainty but most formal emigrants need to keep their SARS number active, more comment below

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4 hours ago, Eagle101 said:

 

Is the only way of closing ours SARS tax accounts  by going the path of Formal (Financial) emigration through the Reserve Bank?

HVZ: No you can achieve without formal emigration, provided you do not fall into the the category of tax files, as published annually by SARS. One being an owner of immovable property - may not need annual tax filing but you need a tax number. The other being a member of retirement fund or SA investement, you often need  to retain a tax number albeit that its dormant or in S-code 

 

(If so, then seems like this is the only way of really protecting oneself from possible tax law changes that may have implications further down the road)

Treaty changes will dictate, closing or keeping open will not protect or shield you

 

A related aspect that has me a bit concerned is the possible future tax implications for our children.  Even though they wont have SARS tax numbers, unless we have formally closed all ties with SARS,  who know what the implications could be in the future shoud laws be passed etc, i.e. our children could be in breach of the RSA Tax laws for years and years, and never even know....)

This is a what if fear which i can't really forecast but suffice to say unlike USA, RSA has no tax regime based on nationality.

9

 

4 hours ago, Eagle101 said:

 

From the 2017 SARS tax return, they now include a question about if you ceassed to be a Resident of RSA during the year:

If a person answers YES, does this question trigger the CGT liability on deemed sales,  or is that only CGT liability only triggerred when a person formally emigtrates (which I assume to be the case)? 

HVZ: Tax emigration triggers the exit CGT and its due just because you tax emigrated - answering the question does not trigger it, it merely triggers reporting. You accepting a PR tiggered the exit and your treaty position dictates the date 

 

What about if a person ceased to be a RSA Resident many years ago (before 2017, when this question was added)?

HVZ: You have to re-open using VDP options

5

 

 

4 hours ago, Eagle101 said:

I wrote & hand  delivered a letter to SARS stating that we were indefinately re-locating to AU, and in terms of the double taxation agreement between AU & RSA, were now regarded as AU Tax residents, therefore we are no longer RSA Tax Residents.

HVZ: your letter triggered the tax so not answerings the 2017 question honestly, opens you up to the Mark Kingon statement last week: we know who you are, meet you in jail. They have their aim on unpaid exit tax and taxpayers not complying with the 183/60 day rules

 

 I did not fill in a specific form, and as mentioned, it was never before been asked on a SARS tax form prior to 2017 - Would that be fine? (I included copies of our PR Visa's ATO TAx registration, new contact details like address & phone numbers etc) and got SARS to stamp my copy.

HVZ: The letter is fine but the compliance following the letter appears to be suspicious and I would suggest you ensure your SA tax filing matching the guts and honesty of your letter, hand delivered.

 

Each year I still submit a SARS tax return, only including interest earned on a few Rand in a RSA bank account (only a few hundred rand interest - no other income or assets in RSA) - The website seems a bit unclear (as they say if you hold funds/assets worth > R225,000 you need to submit, but that would be for RSA Tax residents - they do not seem to address the situation if you are a NON RSA tax resident). 

HVZ: I do not think your summary is correct. Their guidance is correct and you may not be on the correct page or the confusion comes in because you do not really believe or act on your own letter. if you really filed by hand the letter you said, why are you looking at the tax resident pages? Look at the tax non-resident pages and ensure the tax filing for the year-end following the move to Oz, was correctly filed. See http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-IT-G13%20-%20Tax%20Brochure%20for%20Non%20Residents.pdf and may I suggest start believing and acting on your position you bravely took in a letter and do not keep on searching on pages you believe does not apply to you. 

 

 

Do I in fact need to keep submitting these RSA tax returns each year?  (I am just concerned if I stop, and in a few years time I log into EFiling to check, that EFiling auto generates all these tax returns, and therefore shows then as overdue and not submitted....) 

HVZ: ensure your tax exit year is correctly filed. If not, file the VDP options or do the correction request route on work page (eFile) should it be open and active on your profile.  Then you make an annual decision until you have a letter from SARS that your tax file was closed or placed in s-code. This is not an easy procees and specific steps need to be taken. You have not completed all the necessary steps. Follow up the letter with a correct CGT disclosure, attach a TRC issued by ATO. Close your SA bank account and ensure you hold no SA investments / presence that may cause future tax filing. In a sworn affadavit state you are not aa beneficiary of a SA trust, you hold not shares that may attract SA CGT or SA dividend withholding tax, attach aa deeds office search showing no property on your name. Add a declaration that you hold no SA life cover and no SA retirement funds.  Any one of the listed items an issue? I guess your tax number will need to stay active but tax filing or the need to file need to be taken on a yearly basis. 

 

 

Thanks - Any comments would  be appreciated.

 

 

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[Eagle101]

Thanks very much Hugo2 for sharing all your insight and knowledge on this rather confusing aspect of the process - it is much appreciated!