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Angelasmash

Financial Immigration

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Angelasmash

I am leaving SA in a a couple of months time and I would like to Financially immigrate as well. Would any one be able to tell me how to go about it as I am not sure where to start?

I have heard that we will be taxed in SA and then again in Australia. Is there any legal way of avoiding that or of minimizing the amount? 

Also, what are the tax implications on moving retirement and provident funds?

Thanks in advance

 

 

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frosty

Not 100% sure on the process yet either. What I have been told about Retirement/Pension is that the amount will be paid out and you will be taxed accordingly (minus your lump sum allowance) you will then have the option to either reinvest or not on the other side. I may stand corrected.

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TakeItOnTheChin
13 hours ago, Angelasmash said:

I am leaving SA in a a couple of months time and I would like to Financially immigrate as well. Would any one be able to tell me how to go about it as I am not sure where to start?

I have heard that we will be taxed in SA and then again in Australia. Is there any legal way of avoiding that or of minimizing the amount? 

Also, what are the tax implications on moving retirement and provident funds?

Thanks in advance

 

 

This is not exactly true, you will not be taxed in SA if you are not going to be resident in SA. There are certain criteria you would have to meet to be taxed in SA, which includes spending an extended amount of time in SA each year, possibly beyond 90 days, and it would have to be your base, in other words you would have a home which you return to. Folks are in a panic for nothing. Retirement and provident funds can be withdrawn without having to financially immigrate. Yes you will get taxed but rather get that money out now, in a few years time when SA's exchange rate goes to sh............... then those pensions may be worth nothing if you leave them in SA. Retirement annuities will require you to financially immigrate though.

 

Good luck

Edited by TakeItOnTheChin

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Hugo2

Good day

 

if you are tax resident in Oz paying tax on worldwide income, you will pay SA tax on your RA lump sum

 

You will indeed then also pay ATO tax on the lump sum but not on the entire fund. You pay ATO tax on the delta between cash value on tax arrival date and cash out date. You can deduct contributions made in SA while in Oz. 

 

Because of the penalty clauses in SA, if you cash in quick enough there is no cash value growth between ATO tax resident arrival date and cash out date. Also ATO allow you to transfer tax free into Super if done within 6 months of arrival in Oz

 

Welcome to inbox me, as this is my specialist tax field

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Hugo2
8 hours ago, TakeItOnTheChin said:

This is not exactly true, you will not be taxed in SA if you are not going to be resident in SA.

Good luck

You incorrect. Treaty allows SARS a tax at source 

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Hugo2
8 hours ago, TakeItOnTheChin said:

there are certain criteria you would have to meet to be taxed in SA, which includes spending an extended amount of time in SA each year, possibly beyond 90 days, and it would have to be your base, in other words you would have a home which you return to.

The question deals with retirement and provident funds and days count is completely irrelevant  - what you refer to may be the rules for remuneration should your Oz employer send you to SA or if you spend some days in SA at SA employer. Then the rule is also complex. Below 181 days in SA paid by Oz employer with no SA branch is only taxed in Oz. If you work 2 days in SA for SA employer or Oz employer that recovers a fee from SA, then SARS can tax you 2/365 x annual salary

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Hugo2
8 hours ago, TakeItOnTheChin said:

. Retirement and provident funds can be withdrawn without having to financially immigrate. 

 

Good luck

You incorrect. Provident and pension fund can be extracted from SA before age 55 without formal emigration yet RA can only be encashed before age 55 once you have formally or financially emigrated. 

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TakeItOnTheChin
15 hours ago, Hugo2 said:

You incorrect. Provident and pension fund can be extracted from SA before age 55 without formal emigration yet RA can only be encashed before age 55 once you have formally or financially emigrated. 

Kind of what I was trying to say, maybe my terminology not that of an expert

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TakeItOnTheChin
15 hours ago, Hugo2 said:

The question deals with retirement and provident funds and days count is completely irrelevant  - what you refer to may be the rules for remuneration should your Oz employer send you to SA or if you spend some days in SA at SA employer. Then the rule is also complex. Below 181 days in SA paid by Oz employer with no SA branch is only taxed in Oz. If you work 2 days in SA for SA employer or Oz employer that recovers a fee from SA, then SARS can tax you 2/365 x annual salary

I was referring to remuneration and the normal immigrant who does not return to RSA but remains a citizen, they would not be affected?

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TimeToGo
On ‎1‎/‎30‎/‎2019 at 4:29 PM, Hugo2 said:

You incorrect. Provident and pension fund can be extracted from SA before age 55 without formal emigration yet RA can only be encashed before age 55 once you have formally or financially emigrated. 

@Hugo2, what options are available to transfer the value of your RAs once you are over 55? 

Edited by TimeToGo

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TimeToGo
On 1/31/2019 at 3:58 PM, TimeToGo said:

@Hugo2, what options are available to transfer the value of your RAs once you are over 55? 

Hi Anyone reading this (and asking the same question),

Just for information, I have found out that the same options apply if you are over 55.  Wording of the messages above, as well as just about every article I have read on this subject make it sound is if one cannot encash an RA once you are over 55.  What they mean to say is that even if you are under 55 (and wouldn't therefore have access to your RA) the only way you can encash it is if you financially emigrate.  English is such an imprecise language!

Edited by TimeToGo

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BellaR

So if I have nothing in SA? I’ve already cashed in RAs etc. I own no property there. I am an Australian citizen and didn’t apply to have dual citizenship. I live in Australia and have not spent time in SA since I left in 2012.  Do I still need to be panicked about the proposed tax thing?

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TimeToGo

No you don’t have anything to worry about.  As I understand it you need to be tax resident in SA to pay this new tax. From your post you havent been in SA since 2012, so no worries for you! 

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BellaR
4 minutes ago, TimeToGo said:

No you don’t have anything to worry about.  As I understand it you need to be tax resident in SA to pay this new tax. From your post you havent been in SA since 2012, so no worries for you! 

I thought the same, but wanted to be sure, so thank you!😁

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XXXXX

tax residency can be complex (and I encourage you to seek appropriate tax advice if deemed necessary), but financial immigration itself  has no relevance on your tax residency..........     

 

The simple answer is that if you been in Australia since 2012, have set up your household in Australia and regard this move (in form and substance) as of being a permanent nature, then you are no longer a South African resident under the income tax act - and thus the proposed changes don't apply to you.   

 

For clarity - the proposed changes are only applicable to South African TAX residents (as defined per the income tax act) - this legislation would only be applied typically to South African tax residents temporarily working abroad.  

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