Tiermelk Posted November 17, 2015 Report Share Posted November 17, 2015 SARS introduced tax free investment accounts this year - http://www.sars.gov.za/TaxTypes/PIT/Pages/Tax-Free-Investment-Accounts.aspAny ideas if you have to declare the income of these in Australia as an Australian tax resident?I would guess you still have to pay tax on this income in Australia even though SA takes it as tax free... Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted November 17, 2015 Report Share Posted November 17, 2015 The tax free portion should only have a benefit in South Africa and protect against South African tax. Assuming you are taxed on your worldwide income then you must include any realised income in Australia. So if you are only investing in fixed deposit then you should declare interest earned in Australia, if capital gain from ETF then normal capital gains tax concessions should apply. Since the nature of the income must be reported to SARS, the investment entity will be able to provide details to you of the nature of the income (interest / dividends).What I am not sure about is when it is realised so when do the investor become entitled to it? If say the interest accrues in the product (say a policy) and you can withdraw it at any time, then it must be included in the tax year it accrues. However if there is a condition attached say that you cannot withdraw the interest within the first year (similar to a term deposit), so you have no entitlement to withdraw on accrual, then arguably the interest income must only be included in the future tax year when there are no conditions. Quote Link to comment Share on other sites More sharing options...
Tiermelk Posted November 17, 2015 Author Report Share Posted November 17, 2015 Thanks Gerhard, knew you would have the answer! FNB states (https://www.fnb.co.za/invest/tax-free-accounts/FAQ.html): Withdrawals can be made at anytime, and are tax free.Reinvestments of returns or dividends will not count as contributions as long as they are not withdrawn and reinvested. Satrix have a product http://www.satrix.co.za/tax-free-savings.php So as an Australian Tax resident, with no income in SA, the income of this should still be submitted to ATO as part of your world wide income even though it`s tax free in SA. Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted November 17, 2015 Report Share Posted November 17, 2015 Yes Tiermelk, based on these facts it should be included in Australian tax return and since tax free in RSA you will not have foreign tax credit to use in Australia. The income will retain its nature though such as interest / capital gain. 1 Quote Link to comment Share on other sites More sharing options...
Mauro Posted January 13, 2017 Report Share Posted January 13, 2017 Hi, I'm resurrecting this topic as I'm kind of new to the whole investing thing and am also looking to start the whole process in the next few months. My question is, is it worth me opening up a TFSA account, and possibly some other ETF Accounts, in SA if I plan to be in Oz in the next 1 1/2 years? Thanks Mauro Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted January 25, 2017 Report Share Posted January 25, 2017 Mauro, I am guessing your question relates to tax only. Whether this is a good investment is another story. For tax there is no difference, either you will pay tax in RSA and get the credit when you include the income in Australia or you will have no credit (for taxes paid in RSA) in Australia. Either way Australia will tax any interest / dividends / growth if you are a tax resident here. But if you cash in your investments and bring all the money with when you settle in Australia then there should not be any complications. Quote Link to comment Share on other sites More sharing options...
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