Closing bank accounts?

[TarrynR]

Hi everyone,

I'm new to this forum. My husband and i are emigrating to Australia on a 186 visa. We submitted our visa last week and anticipate leaving in February 2016. We are very fortunate because my new company that side is paying for our move over.

I have a question about closing bank accounts this side. We are trying to cash in our retirement annuities this side, but need an emigration tax clearance. I've been trying to read up on the process of officially "financially" emigrating but it's really confusing! We will leave the country with less than R10 000 as most of our free cash is being used to get our 2 dogs over there. Do we really have to go through the reserve bank and declare all our assets and finances? I was hoping we could just pay up our accounts and close our bank accounts the day we leave and change what little money we have left to forex! We really don't want to leave open bank accounts here as I feel it will be a mission to manage from Australia. Please can someone offer some advise on the best way forward?

[EmNew]

I stand corrected, but as we're in process of wrapping up our financial affairs at the moment, as far as I know if you want to encash your retirement policies pre retirement to get the money out of SA, you have no choice but to go the financial emmigration route.

That does mean tax clearance, SARB forms, declaring all assets & liabilities etc, blocked accounts and closing all existing accounts.

Perhaps contact FXCapital or Exchange4Free for advice, or the company that you took out the RAF policies with to make sure exactly what is needed in your case.

[TarrynR]

Thanks for the advise. Have you gone the whole SARB route?

[monsta]

EmNew, it might have changed, but my dad cashed out my retirement fund before I left. But, I haven't migrated anywhere, officially .

But, the system could have changed, it could have been down to the amounts invokved, etc..

I have heard that dealing with SARS is its own kind of specialisation these days. I have heard horror stories like how SARS had a cash flow problem a few years ago and were stalling on paying out refunds.

So, you are correct in saying she should contact a professional..

[HadEnoughofJuju]

We are in the process of having my wife's RA paid out and we have been in Australia for 2 years, 5 Months and 4 days and it's been an uphill battle all the way. You can pay a company like CashKows or Exchange4Free but that may not be worth it depending on how much money you have to cash out you may end up paying more than the policy is worth. To give you an idea, our policy is worth R24000.00 and the company we approached for a quote wanted to charge us R30000.00 to get the policy cashed out and paid into our Aus bank account so we chose not to use them.

Do NOT close your bank accounts that are attached to SARS. You will need to complete you final tax returns and be up to date with SARS before you can apply for a tax clearance for emigration purposes, if SARS owe you any money and your account has been closed you are going to have a VERY hard time getting your bank account details changed with SARS from here. It is possible but only in very specific circumstances and not easy to do as I said before. Once your tax affairs are sorted and you have the tax clearance certificates, you then need to change your bank account to a blocked bank account before apply to the South African Reserve bank for the financial emigration.

Make sure that you are setup to do eFiling online or that you have someone in South Africa you can trust with a power of attorney, should you need someone to go to SARS on your behalf. Don't leave anything to chance once you have started the application process either. Keep on top of it. We had some in South Africa who used to handle all our tax affairs because we had multiple streams of income and complicated returns. Once we were out of the country, we were forgotten about. We thought we could trust her but it turned out that once she had her money that was the last we heard from her. Out of sight, out of mind. Took us almost 18 months to get our tax returns finalised and submitted to SARS which held the entire process up.

I can send you the details of a company here in Brisbane that handle the whole process and who purport to not be ridiculously expensive. I never got a quote from them because I only found them after the process was at about 90%. Having said all this, there are certain types of policies that can be paid out without going through this whole process but the only way your are going to find that out is to contact the financial advisor who handles your policy or the company the policy is with and ask them what it would take to get the policy paid out.

[monsta]

Yep, its a pain. I had to go through it.

Atbine point we were told that SARS could not lay money into an account in my name because it was for my wife. They apparently have an independent company double check all their payments and our payment would be rejected.

So, they make our lives way more difficult because they need to protect us from their own staff?!?!!

We then heard via the backdoor that SARS had a cash flow problem and the staff were told to stall payments! Apparently the high ups miss calculated a few things.

Apparently, the cash flow problem also made sure that staff bonuses were not that great that year. Of course that deeply saddened me. I would not be surprised if the executives got a huge bonus for "dealing" with the cash flow crisis!

Edited September 3, 2015 by monsta

[TarrynR]

Surely there's a way to get a tax clearance before you leave and have your tax all up to date? The total sum of our RA's isn't even R100k, but we need every cent to pay for our dogs otherwise I'd be inclined to just leave them.

SARS are pretty good at paying out once a tax return is completed. I did mine last week Thursday and got my refund yesterday! I think their cash flow problems have been sorted.

Thanks again for the advise!

[HadEnoughofJuju]

There are several different types of tax clerance certificates, one of which is for emigration purposes. You can't apply for that before you have finalized your tax returns which you can only do once you have IRP5's.

One of the other documents you will need to submit to the company who holds the RA is a certificate of residency from the ATO which you can only get once you have taken up permanent residence in Aus. Unfortunately it's just one of those things that there is no easy way around.

P.S. Sorry, only half read the previous post.

[TarrynR]

Ok thanks. I guess my dreams of leaving SA without any strings attached aren't going to happen!

I got this info from my bank (FNB) today. I thought it was a nice summary of information so I thought I'd share it with the forum. It is specific to FNB though. Not sure what other banks do or don't do!

To enable us to place an emigration on record with the Financial Surveillance Department of the South African Reserve Bank, the attached form M.P.336( must be completed by the client, confirming that she is relinquishing her South African residency, to take up permanent residency abroad. The completed form M.P.336( must be returned to us together with a copies of the face page of her passport, SA ID book and a copy of the visa/document confirming that permanent residency has been granted in the new country of domicile and copies of the document of title of assets declared. If emigrating as a family unit, copies of the aforementioned documents will be required for the whole family unit. These documents may be scanned to us for checking before forwarding to us via internal mail.

Item 11 on the M.P.336( is completed and signed by the Bank on receipt of all the documents required to support the application and a copy of the M.P.336( will need to be certified to enable the client to arrange for a Tax Clearance Certificate for Emigration - the certified copy of the M.P.336( must be taken to SARS, together with the completed Tax Clearance Certificate Application Form IT21(a), attached. Please note that SARS will require the originally completed and signed form IT21(a) and the Tax Clearance Certificate must be for emigration. We unfortunately do not assist with obtaining this tax clearance certificate for emigration and the client will need to attend to this or appoint a tax consultant/South African representative to attend to this on her behalf.

When received, the original Tax Clearance Certificate, must be forwarded to us so we can process the emigration, together with original M.P.336( and copies of the supporting documentation.

We will require the original documents of title of any remaining South African assets declared on the form M.P.336( and not to be sold/redeemed, i.e. policy documents, share certificates, Title Deeds, etc. as these documents need to be placed in safe custody and held to the order of the South African Reserve Bank. These assets, which will be termed as blocked, will be controlled by us and dealt with in terms of the prevailing Exchange Control Rulings. If for any reason the client is not in a position to furnish us with the original documents of Title, we require clarifying comments and will need to obtain specific prior approval for the document to be kept elsewhere, if necessary. We will require a written undertaking from the holder that the document will not be released without our prior approval. An example of this would be an outstanding bond. If the property is not being sold and the bond expunged, there will still be a liability on the property and the Bond Holder would retain the Title Deeds until the bond is settled or the property sold. We require details of how the bond will be serviced, e.g. rental income, remittance of funds from abroad. Another example will be shares on STRATE as there would be no physical share certificate. We do however require the original share certificates of any unlisted shares declared that will not be sold prior to emigration.

Copies of the document of title of assets to be redeemed will be required.

Please note that all South African liabilities must be settled prior to emigration and where same is not possible, we require clarifying comments, together with proposed settlement arrangements as we will need to obtain a specific approval from the Financial Surveillance Department of the South African Reserve Bank to settle liabilities subsequent to emigration. Again the example of the bond account aforementioned can be used. All short term liabilities, such as credit cards, overdrafts, etc. must be expunged prior to emigration. Where the person has already left and remaining liabilities are applicable it will also be necessary to obtain an understanding of how this will be expunged before any allowances may be accorded.

Please note that once the emigration has been finalized, all access mechanisms, credit cards, debit cards, cheque books, internet will be cancelled and all requests must be directed to us for any transaction requirements on the account/s. Internet access will be granted on request for viewing purposes only. At this stage any existing accounts will be converted to blocked accounts or a new blocked account will be opened, if required and if necessary. Debit orders will not be interrupted and will be processed as normal.

Please ensure that the client updates her new contact details with your branch as we will only contact her using the detail on our systems.

Since the client will have emigrated and will not physically be in South Africa to furnish us with instructions on her account it will be necessary to obtain the attached Waiver and Indemnity Mandate. This mandate, which must be notarized/stamped by the branch, allows us to accept fax/e-mail instructions from the client. Please, however, note that the client will still be contacted to confirm the instruction hence the request that she update her contact details with the branch.

Funds in the blocked account may be utilized locally in South Africa or it could be transferred to the emigrant client’s offshore account or both. If emigrating as a single person or family unit, currently capital up to the foreign equivalent of R 10 million or R 20 million, respectively may be remitted abroad, provided the total net value of the South African assets do not exceed the respective amounts. Should the total net asset value exceed the amounts detailed, prior approval will be required from the South African Reserve Bank to remit any funds abroad.

If a beneficiary of an Inter Vivos Trust, prior approval will be required from the Reserve Bank to remit any funds abroad.

Income, e.g. pension, annuity benefits where applicable, may be remitted abroad and a standing instruction can be put in place once the emigration has been finalized. We advise that the charges currently to remit funds abroad are 0.54% of the Rand value of the transaction with a minimum of R 150.00 and maximum of R 700.00 per transaction, in addition to a swift fee of R 105.00, for the message we send to the bank offshore. So the minimum fee for each transaction will be R 255.00 which could become quite costly if effected on a monthly basis. The client may want to take this into consideration, if applicable, when deciding the frequency of the transfer.

The minimum cost of processing and submitting an exchange control application is R 1,140.00 which is non-refundable and may be increased depending upon the complexity and/or nature and/or size of the submission. A time period of between four to six weeks approximately should be allowed for us to process the request. The attached application fee letter must be signed in this regard.

On receipt of the aforementioned documents, same will be allocated to an Exchange Control officer in order for the emigration to be placed on record with the Financial Surveillance Department of the South African Reserve Bank thus finalizing the emigration from South Africa. If however, the information is incomplete, it will be necessary to obtain further information/documentation.

[Magenta]

We have not financially immigrated so have kept open our bank accounts that are linked to SARS. We have them on the cheapest payment scheme to minimize cost and we went in to the bank and signed forms, etc to allow my parents to oversee the bank accounts. Fortunately my dad is also my tax guy in SA, so that also makes things a bit easier. He suggested only closing bank accounts once you know for sure that everything with SARS has been tied up.

[RedPanda]

Wow, what a mouth full! But thanks for sharing it here!

[Lynnie]

We are in the process of having my wife's RA paid out and we have been in Australia for 2 years, 5 Months and 4 days and it's been an uphill battle all the way. You can pay a company like CashKows or Exchange4Free but that may not be worth it depending on how much money you have to cash out you may end up paying more than the policy is worth. To give you an idea, our policy is worth R24000.00 and the company we approached for a quote wanted to charge us R30000.00 to get the policy cashed out and paid into our Aus bank account so we chose not to use them.

Do NOT close your bank accounts that are attached to SARS. You will need to complete you final tax returns and be up to date with SARS before you can apply for a tax clearance for emigration purposes, if SARS owe you any money and your account has been closed you are going to have a VERY hard time getting your bank account details changed with SARS from here. It is possible but only in very specific circumstances and not easy to do as I said before. Once your tax affairs are sorted and you have the tax clearance certificates, you then need to change your bank account to a blocked bank account before apply to the South African Reserve bank for the financial emigration.

Make sure that you are setup to do eFiling online or that you have someone in South Africa you can trust with a power of attorney, should you need someone to go to SARS on your behalf. Don't leave anything to chance once you have started the application process either. Keep on top of it. We had some in South Africa who used to handle all our tax affairs because we had multiple streams of income and complicated returns. Once we were out of the country, we were forgotten about. We thought we could trust her but it turned out that once she had her money that was the last we heard from her. Out of sight, out of mind. Took us almost 18 months to get our tax returns finalised and submitted to SARS which held the entire process up.

I can send you the details of a company here in Brisbane that handle the whole process and who purport to not be ridiculously expensive. I never got a quote from them because I only found them after the process was at about 90%. Having said all this, there are certain types of policies that can be paid out without going through this whole process but the only way your are going to find that out is to contact the financial advisor who handles your policy or the company the policy is with and ask them what it would take to get the policy paid out.

Hi HEOJJ, I'm going to pm you to get the details :-)

[Heymanse]

Ok thanks. I guess my dreams of leaving SA without any strings attached aren't going to happen!

I got this info from my bank (FNB) today. I thought it was a nice summary of information so I thought I'd share it with the forum. It is specific to FNB though. Not sure what other banks do or don't do!

To enable us to place an emigration on record with the Financial Surveillance Department of the South African Reserve Bank, the attached form M.P.336( must be completed by the client, confirming that she is relinquishing her South African residency, to take up permanent residency abroad. The completed form M.P.336( must be returned to us together with a copies of the face page of her passport, SA ID book and a copy of the visa/document confirming that permanent residency has been granted in the new country of domicile and copies of the document of title of assets declared. If emigrating as a family unit, copies of the aforementioned documents will be required for the whole family unit. These documents may be scanned to us for checking before forwarding to us via internal mail.

Item 11 on the M.P.336( is completed and signed by the Bank on receipt of all the documents required to support the application and a copy of the M.P.336( will need to be certified to enable the client to arrange for a Tax Clearance Certificate for Emigration - the certified copy of the M.P.336( must be taken to SARS, together with the completed Tax Clearance Certificate Application Form IT21(a), attached. Please note that SARS will require the originally completed and signed form IT21(a) and the Tax Clearance Certificate must be for emigration. We unfortunately do not assist with obtaining this tax clearance certificate for emigration and the client will need to attend to this or appoint a tax consultant/South African representative to attend to this on her behalf.

When received, the original Tax Clearance Certificate, must be forwarded to us so we can process the emigration, together with original M.P.336( and copies of the supporting documentation.

We will require the original documents of title of any remaining South African assets declared on the form M.P.336( and not to be sold/redeemed, i.e. policy documents, share certificates, Title Deeds, etc. as these documents need to be placed in safe custody and held to the order of the South African Reserve Bank. These assets, which will be termed as blocked, will be controlled by us and dealt with in terms of the prevailing Exchange Control Rulings. If for any reason the client is not in a position to furnish us with the original documents of Title, we require clarifying comments and will need to obtain specific prior approval for the document to be kept elsewhere, if necessary. We will require a written undertaking from the holder that the document will not be released without our prior approval. An example of this would be an outstanding bond. If the property is not being sold and the bond expunged, there will still be a liability on the property and the Bond Holder would retain the Title Deeds until the bond is settled or the property sold. We require details of how the bond will be serviced, e.g. rental income, remittance of funds from abroad. Another example will be shares on STRATE as there would be no physical share certificate. We do however require the original share certificates of any unlisted shares declared that will not be sold prior to emigration.

Copies of the document of title of assets to be redeemed will be required.

Please note that all South African liabilities must be settled prior to emigration and where same is not possible, we require clarifying comments, together with proposed settlement arrangements as we will need to obtain a specific approval from the Financial Surveillance Department of the South African Reserve Bank to settle liabilities subsequent to emigration. Again the example of the bond account aforementioned can be used. All short term liabilities, such as credit cards, overdrafts, etc. must be expunged prior to emigration. Where the person has already left and remaining liabilities are applicable it will also be necessary to obtain an understanding of how this will be expunged before any allowances may be accorded.

Please note that once the emigration has been finalized, all access mechanisms, credit cards, debit cards, cheque books, internet will be cancelled and all requests must be directed to us for any transaction requirements on the account/s. Internet access will be granted on request for viewing purposes only. At this stage any existing accounts will be converted to blocked accounts or a new blocked account will be opened, if required and if necessary. Debit orders will not be interrupted and will be processed as normal.

Please ensure that the client updates her new contact details with your branch as we will only contact her using the detail on our systems.

Since the client will have emigrated and will not physically be in South Africa to furnish us with instructions on her account it will be necessary to obtain the attached Waiver and Indemnity Mandate. This mandate, which must be notarized/stamped by the branch, allows us to accept fax/e-mail instructions from the client. Please, however, note that the client will still be contacted to confirm the instruction hence the request that she update her contact details with the branch.

Funds in the blocked account may be utilized locally in South Africa or it could be transferred to the emigrant client’s offshore account or both. If emigrating as a single person or family unit, currently capital up to the foreign equivalent of R 10 million or R 20 million, respectively may be remitted abroad, provided the total net value of the South African assets do not exceed the respective amounts. Should the total net asset value exceed the amounts detailed, prior approval will be required from the South African Reserve Bank to remit any funds abroad.

If a beneficiary of an Inter Vivos Trust, prior approval will be required from the Reserve Bank to remit any funds abroad.

Income, e.g. pension, annuity benefits where applicable, may be remitted abroad and a standing instruction can be put in place once the emigration has been finalized. We advise that the charges currently to remit funds abroad are 0.54% of the Rand value of the transaction with a minimum of R 150.00 and maximum of R 700.00 per transaction, in addition to a swift fee of R 105.00, for the message we send to the bank offshore. So the minimum fee for each transaction will be R 255.00 which could become quite costly if effected on a monthly basis. The client may want to take this into consideration, if applicable, when deciding the frequency of the transfer.

The minimum cost of processing and submitting an exchange control application is R 1,140.00 which is non-refundable and may be increased depending upon the complexity and/or nature and/or size of the submission. A time period of between four to six weeks approximately should be allowed for us to process the request. The attached application fee letter must be signed in this regard.

On receipt of the aforementioned documents, same will be allocated to an Exchange Control officer in order for the emigration to be placed on record with the Financial Surveillance Department of the South African Reserve Bank thus finalizing the emigration from South Africa. If however, the information is incomplete, it will be necessary to obtain further information/documentation.

Hi TarrynR,

I know this might sound like a mouthful but in all honesty - it sounds worse than it is. Our experience when going through the financial emigration was actually pretty good. We made an appointment with Std Bank in Braamfontein (their Foreign Exchange branch) where they told us what we needed to bring to our next meeting. With the next meeting I had all my documents ready and we completed the MP336( form (http://www2.resbank.co.za/internet/Publication.nsf/LADV/B80FCEDECF0BE97C42256F5F0035062A/$File/MP336b.pdf) without too much hassle. We made a point of visiting the SARS offices in Pretoria one morning and we were there before they even opened up their doors which meant we were the first to be seen on the day. It took us less than an hour and had our Tax Clearance Certificates in hand which we could take back to Standard Bank in Braamfontein. Our normal bank accounts was changed to a blocked rand account because of some monthly debit payments that still needed to be paid from these accounts, but if you have no more funds to dispose of, you won't have to concern yourself about that part. I think it is worth it to go through the process - it gives you peace of mind that in you won't have any problems in future.

[TarrynR]

Hi Heymanse,

Thanks for your post. It's so daunting doing this whole process as everyone tells us something else! So it's nice to know its not so bad from someone that has actually been through it!

Quick question, did they freeze your bank account straight away? FNB told me that they will only freeze it the day after we leave so we can at least still withdraw money for groceries, etc before we leave.

Oh and another question... Did SARS ask you to do an early tax return for the current year?

Hope you don't mind my questions!

[Heymanse]

The bank is correct. Our accounts only became blocked accounts the day after our departure. We didn't do an early tax return but our tax clearance certificate said that we were up to date with our tax up to that point. I still had an RA and my broker took care of my tax return for me until I cashed it out 2-3 years later. After the last and final tax return was done by him and the final payment made into my account, I instructed Std Bank to close the blocked rand account.

A blocked account basically means that the bank will run your account on your behalf. If you need money transferred to yourself or anyone else in South Africa for instance for gifts. You send them an email and they do what you ask them to do.

[Stace]

Do you know what we need to do if we are not financially emigrating, and want to keep our FNB accounts open?

[Heymanse]

I would not recommend this option but to each their own. You will have to jump through hoops to then close them. Also will have to jump through hoops to then officially financially emigrate. I'll give you a scenario. Should you become a beneficiary in someone's estate, a South African bank will need proof from the Reserve Bank that you emigrated financially before transferring the money to your Aus bank account. Why would you want to keep your bank accounts open in South Africa?

[Stace]

Thanks Heymanse, I can definitely understand what you mean.

We want to keep our accounts open as we are not sure whether we are permanently emigrating, or if we will just be in Aus for an extended period, for example, 5 years. We know its an option to stay there forever, but the option of home is always there too for us, we thought we were away for good before, and find ourselves back in SA. I have a feeling Aus will be for good, but feel like I need to be a little more clever haha. Won't exactly do harm to keep them open/

We lived overseas for 6 years already, before returning to SA. Can't even begin to explain what a mission it was to start fresh back in SA because we had zero credit history for the past 6 years - we could not open accounts, we could not get credit, we could not buy a car or house, not even cellphone contract. As adults, having to ask your father to buy you a car in his name, is not the most amazing thing haha. Its just really to keep them open for what if. We also still have to keep paying our cellphone contract till mid next year, which is a debit order.

Edited September 30, 2015 by Stace

[Heymanse]

Knowing now your reasons for keeping the accounts open, it makes perfect sense to do it your way. Especially if you're not 100% sure on whether or not you'll return to SA. Good luck with the decisions ahead.

[LouiseMark]

Hello all. I realise this is an old thread but maybe someone will have some experience with issue.

We need to keep our SA bank accounts open (2) as we have policies that we wish to see through to retirement.

One bank branch said we have to convert to a non-residence bank profile (this was Standard Bank) but once we approached our closest branch they knew nothing about this. We have not even approached the other bank yet.

Our main concern is how does one FICA the bank account at the required intervals from overseas in order for the account NOT to be frozen due to lack of FICA.

Each bank and branch seem to have their own set of useless individuals who cannot answer a relevant question. Very frustrated

TIA

 

[HadEnoughofJuju]

You can't FICA an account from outside RSA, you also can't close accounts (unless it's a credit card) from overseas either. Make sure you keep both accounts that are attached to SARS and the policies open. You can not have a policy paid out into another persons account which we found out the hard way. 

 

The local branches of each bank know nothing about foreign accounts or migrant accounts. You will need to phone the migrant banking division of Standard Bank, of which there is only one branch in Joburg and ask them what you need to do. There are forms that you fill in that give your migrant banker (assigned to you based on your surname) that allow you to affect transactions via email or fax. You cannot use the blocked bank account any other way. You can set up debit orders and people can pay money Its that account from RSA accounts.

 

If you want I can PM you the number of the lady who handled our financial emigration. She's been dealing with this kind of thing for years and really knows her stuff. She also doesn't cost anywhere near what the other organisations cost and you get great service as well.

Edited May 3, 2017 by HadEnoughofJuju

[HopefulJo]

8 hours ago, HadEnoughofJuju said:

 

If you want I can PM you the number of the lady who handled our financial emigration. She's been dealing with this kind of thing for years and really knows her stuff. She also doesn't cost anywhere near what the other organisations cost and you get great service as well.

 Hi there

please send me the details as well. thank you :-)

[LouiseMark]

Yes please pm me details! That would be so helpful! Thank you!

[CazK]

Hi @HadEnoughofJuju, please could you pm details to me too. Really appreciate all the help we can get at the moment!