The New TAX laws advice from a TAX Lawyer

[Nev]

Breytenbach from these forums put me in touch with a tax advocate in South Africa, so i could find out about them trying to climb into our income with this new law, and in short i have nothing to worry about & i dont need to de-register from SARS, i am still registered with sars and have a tax number and i can just ignore it all.

 

He had the specifics at hand, but in brief, i have no assets there, haven't been back for more than 90 days in the last 6 years, not more than 6 Months in total, and do not consider South Africa home but consider SA home (I have assets in AU...etc), for that reason i am not considered to be a resident of south Africa, and therefore this new law will not be applicable to me, if one of those aspects are not true for you things can still be done but may be more complex so get advice.

 

He scheduled a call with me and ran me though all the specifics, all for free which was really good of him so i hope it is ok to post his details here, if anyone has specific TAX questions this is the guy to contact:

Albertus Marais

MCom (Tax) (UCT), CA (SA), Advocate of the High Court of South Africa, SARS Tax Practitioner (0000888)

albertusmarais@ajmtax.co.za

 

 

Been in Auz too long so ....Legal Note: i am not a lawyer and cant give tax advice get advice if you need it

[DAC]

Nev,

 

Thanks for the information. I've noted in a different thread, that the new Tax Law is part of the reason I joined the forum, to try get some answers.

I have a small RA in SA, but otherwise no assets, accounts etc. Like you I haven't been back to SA much at all, and all investments, assets, house etc are all based in Oz.

It has been pointed out that the rule doesn't apply to SA non residents in terms of tax, but unless you have financially emigrated, is based on the ordinary residence and physical presence tests, which when it comes to ordinary resident are somewhat subjective.

 

As I understand the rule won't apply to a number of us, especially those who have been out of SA for a number of years, it does however raise the issue of formal emigration for some of us.

 

On a side note I assume above that you meant - '....and do not consider South Africa home but consider AU home ...

[Shampoo]

If you pass the "residency test" and AU is your home then no worries at all regardless whether you "Officially" emigrated or not. 

This new law is meant for SA residents working abroad that have strong ties to SA such as immediate family and a home where you go to during your working breaks.

[Nev]

Hi DAC, 

 

Oops, yep on the AU,

 

Also from what i understand the assets in south Africa can point to you still being a resident... because you still have assets there, you might be better off getting it closed?

 

 

[DAC]

Nev,

 

I may well do that. Just need to go through the formal emigration process which I'm looking in to at present.

[DAC]

Agree with @Shampoo comment and information regarding the 'residency' test to see if you are resident or non-resident.

 

This is also covered under the SA/Australia DTA. You are classed as a resident of either SA or Australia, but not both, as I understand it.

 

Quote

Article 4
Residence

 

1    For the purposes of this Agreement, a person is a resident of a Contracting State:

(a)    in the case of Australia, if the person is a resident of Australia for the purposes of Australian tax but does not include any person who is liable to tax in Australia in respect only of income from sources in Australia; and

(b)    in the case of South Africa, any individual who is ordinarily resident in South Africa and any other person which has its place of effective management in South Africa.

The term "resident" also includes a Contracting State and any political subdivision or local authority of that State.

 

2    Where by reason of the preceding provisions of this Article a person, being an individual, is a resident of both Contracting States, then the person shall be deemed to be a resident only of the Contracting State in which a permanent home is available to the person, or if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident only of the Contracting State with which the person's personal and economic relations are closer.

 

3    Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

 

http://www.austlii.edu.au/au/other/dfat/treaties/1999/34.html

Edited August 31, 2017 by DAC

[Yuvi]

Hi Guys,

 

I was about to start a new thread then cam across this, so I am going to ask a tax related question.

Thanks @Nev, I will get in touch with the consultant.

 

I have been in AUS for about 15months. I still have an apartment in SA which I rent out as well as some policies, bank accounts and RA.

My question is:

1) Do I do the SA tax return and then AUS tax return separately?

2) Do I only do the AUS tax return declaring all of these?

3) Do I do the SA return and still declare everything in the AUS return?

 

I am unsure of the process and as well I don't want to get double taxed.

 

Thanks in advance.

[DAC]

@Nev, Thanks for the information.

I recently had an initial consultation with AJM Tax, to discuss and cover both the New Tax Laws and my residency status, and a couple of other tax related queries that I had.

In my case I did pay for the initial consultation, but it was well worth it. Much easier to get a direct specific answer when you discuss things with a person who has the knowledge.

Will definitely use them again if I have any further Tax queries.

[Shampoo]

@Yuvi. You would need professional advice on that as the laws have been changed recently. Your property in SA may not be your primary property any longer and could be "deemed" as sold on the day you became SA non-resident and repurchased at the same price the next day. The deemed Capital Gain will be payable to Sars. This will reset the value and any further gains will be payable to AU IRS. The same applies to any securities you may have in SA.

AU has the same laws should you locate back to SA.