EmNew Posted June 19, 2015 Report Share Posted June 19, 2015 Hi all, We're 101 days from our big exit ( wohoo ) and are still undecided about what to do with our retirement funds.We are both on RAF's as we don't have employer pensions, and have several preservation funds from previous employers lying with various institutions too.We did chat to our independent financial lady, and her advice was to leave all as is for a year, continue contributing, and then after that year decide whether we want to financially emigrate. However, I think she is anti - emigration full stop, which I gleaned from her reaction to our announcement and wonder if her advice is from a purely financial logical point of view, or from the opinion that we will be heading back with our tail between our legs because we will hate Aus as all her friends did.I know we will take a knock in penalties, whether we make them paid up and leave them as is for now, or surrender them completely for financial emigration. My biggest worry is that if we leave them as paid up here, take the lump sums and annuities at 55, that the ZAR/AUD exchange rate in the future will make that money meaningless. I am wondering if we shouldn't take the knock now, get the money over there now and invest it for retirement in AUD asap. Would love to hear thoughts and what anyone has done recently about a similar dilemma?Many thanks. Quote Link to comment Share on other sites More sharing options...
ottg Posted June 19, 2015 Report Share Posted June 19, 2015 @EmNew - Surrender them, go through a financial immigration process asap and bring all your funds across. Also try to resolve maximum issues and paperwork while you still there. While you dont have all the ATO paperwork now perhaps contact Tanya at FXcapital for a way around this! 1 Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted June 20, 2015 Report Share Posted June 20, 2015 We stopped contributing to Retirement Annuities since we did not get the tax benefit of the contributions anymore. There was a penalty but the full penalty was not levied. We then consolidated our RA's and Benefit funds so it is just easier to manage - I can refer you to someone that can help. Most of this process was done while in Australia, no dramas.Our investment strategy is to invest as much in Rand hedge unit trusts type products as possible thereby protecting against the devaluation of Rand. So far the strategy have been working fine. Once we are sure we will never go back we may surrender everything but since not much in RA we might just leave it there and pay for holidays.When you withdraw the tax is quite bad, depending on what you have it could be anywhere from 25% to over 30% in tax only. Ideally you want to reach retirement age and draw annually from these funds under the tax threshold so no tax but then you may be exposed to things like the Government blocking funds going out of SA. It is a bit of a risk.We are now again considering taking the once off withdrawal from Benefit fund and bring it over and so far my wife is all for this since she prefers the money 'close to her' - in Australia.So it depends really what your views are and will you be comfortable with the SA risks. Also keeping in mind if you bring it over then invest it properly because spending it is just bad en there are many poor investments here as well. 1 Quote Link to comment Share on other sites More sharing options...
Hugo2 Posted June 21, 2015 Report Share Posted June 21, 2015 Hi to allAs Tanya can indeed assist to take the funds out, one can not but warn against speaking to FxDealers on tax issues. Just not their field. Once the decision is made do speak to them but do speak to the right advisers in reaching a well informed conclusion Quote Link to comment Share on other sites More sharing options...
Hugo2 Posted June 21, 2015 Report Share Posted June 21, 2015 Hi all, We're 101 days from our big exit ( wohoo ) and are still undecided about what to do with our retirement funds.We are both on RAF's as we don't have employer pensions, and have several preservation funds from previous employers lying with various institutions too.Would love to hear thoughts and what anyone has done recently about a similar dilemma?Many thanks.EmNewit is true that formal emigration is required for the RA, but certain players in the market have really brainwashed us - formally emigrate! No need to make that decision right now but what you really need to consider is listed below:Read this informative blog on Formal emigration - not the answer for all! Ask yourself how quick will you be covered by or contributing to an Oz scheme, be it a Super or any other scheme Only RA's is subject to formal emigration - the rest you can cash in now before you leave or after you left, but in deciding, consider ATO tax year end is 30 June 2015 i.e., you may wish to do it BEFORE you became tax resident in Oz! Yes the comment on doing it before ATP paper storm hits you, are valid The ATO allows you a small window of tax-free transfers - this time line / window period depends on your visa and your Super Fund you go into. I understand the initial deposits are also not capped in the first 6 months - perhaps you need to speak to someone re Supers - I can link you to an adviser in the area you going to stay in, but I know too little to assist myself! The SA tax on lump sums is not determined by any other income i.e. no reason to delay or transfer into a new SA tax years. The lump sums are taxed cumulatively ie each cash in will be taxed higher than the previous one. Quote Link to comment Share on other sites More sharing options...
GaanBos Posted June 21, 2015 Report Share Posted June 21, 2015 Hi,Sorry, but I don't understand the whole process, if you formally immigrate, can you take your pension fund and RA tax free out of the country or do the tax tables for withdrawal still apply?Thanking you in advance. Quote Link to comment Share on other sites More sharing options...
monsta Posted June 21, 2015 Report Share Posted June 21, 2015 Hey guys,There are always risks to these things. Aussie has been a good investment for years. One forum member had her house price double. I read an article where they were worried that commbank share price would go up so much the gross yield would fall below 5% (that's 5% every six months).Go to the websites of a few super companies, like "Australian Super" or ing.com.au. look at the performance on those funds over the last 5 years and 10 years (remember about the Global Financial Crisis). A decent super's growth option is returning over 10% at the moment.So, it boils down to guess work. You might be significantly better off investing in aussie shares, property or super here than leaving your cash in Rands to avoid the tax. But then again, you might not be.The Rand has devalued to a third of what it was a little over 20 years ago. I can't see that trend changing much, but that's just me.But as always, seek professional advise, so you understand the risks Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted June 22, 2015 Report Share Posted June 22, 2015 GaanBos you will not get it out tax free (unless it is less than R25k), financial emigration allows you access to withdraw RA and the withdrawal tax rate in South Africa will apply. Some of the Benefit funds such as provident fund and some pensions funds allows for one lump some withdrawal before retirement (not required to go through financial emigration process) but the withdrawal tax rates apply.Keep in mind it was before tax money contributed to these funds and the growth was taxed at a minimal rate so in a way it makes sense taxing it if you withdraw. Quote Link to comment Share on other sites More sharing options...
GaanBos Posted June 22, 2015 Report Share Posted June 22, 2015 Thank you for the information. Quote Link to comment Share on other sites More sharing options...
EmNew Posted June 23, 2015 Author Report Share Posted June 23, 2015 (edited) @EmNew - Surrender them, go through a financial immigration process asap and bring all your funds across. Also try to resolve maximum issues and paperwork while you still there. While you dont have all the ATO paperwork now perhaps contact Tanya at FXcapital for a way around this!Can you give more specifics on what you mean by 'ATO paperwork' I know that is ATO = Australian Tax Office , but what I am needing is more details on what kind of paperwork / tax implications bringing in surrendered RAF money from South Africa has in Aus Edited June 23, 2015 by EmNew Quote Link to comment Share on other sites More sharing options...
ottg Posted June 23, 2015 Report Share Posted June 23, 2015 We are both on RAF's as we don't have employer pensions, and have several preservation funds from previous employers lying with various institutions too.@EmNew - perhaps I should have read slower. Yours should be straight forward - because you do not have any retirement annuities.Exactly as @Gerhardk says above. In general a preservation funds allow you to make one single lump sum withdrawal - so do that for each preservation. That is to say you didn't dip into it before as then the rules are different.Contact each Preservation Fund administrator and ask them about their process to do your single withdrawal. Just complete the forms, submit them and sit on them to verify progress. Get your tax clearance certificate to get your money across which is just a formality, as long as your previous SARS tax is all up to date. You can start this process while you wait for the preservation funds to be completed as time may not on your side. 1 Quote Link to comment Share on other sites More sharing options...
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