Tax after formal emigration.

[Shampoo]

I formally emigrated via SARS and SARB. I kept my investments on the JSE  but the account was moved to a new blocked account a day after my exit. Should I pay tax on gains as from this new date to IRS? This will give me a new base cost from the day after exit. 

Edited August 25, 2017 by Shampoo

[ottg]

The way I understand is that if you receive any income SARS still want their portion. The mechanism in how and when to go about it, ask FX Capital.

Wrt the blocked account, all it means is that you need to comply with reserve bank rules to transfer money out from RSA.

[Hugo2]

1 hour ago, Shampoo said:

I formally emigrated via SARS and SARB. I kept my investments on the JSE  but the account was moved to a new blocked account a day after my exit. Should I pay tax on gains as from this new date to IRS? This will give me a new base cost from the day after exit. 

Hello! Once you have tax emigrated you should be exempt from tax, so on tax migration date, you paid CGT or Exit tax on the value of the JSE shares. Thereafter no more CGT on future gains as SA does not tax non-residents on JSE shares (excluding property unit trusts and REITS)

[Hugo2]

Make sure you file your ATO tax residency certificate with the share registrar to ensure your dividend withholding tax is 15% and not 20% but now more CGT 

[Shampoo]

Thanks Hugo. Most DTA's state that CGT on securities are payable to the country of one's residency.

[Hugo2]

1 hour ago, Shampoo said:

Thanks Hugo. Most DTA's state that CGT on securities are payable to the country of one's residency.

Yes, that is correct but you referred to IRS, they are USA and they tax you from actual base to actual proceed. I assume you in Australia you need to look at ATO rules. They tax you value on date you became ATO tax resident ie they ignore formal emigration values and SA exit charges. You need to, for ATO determine the base cost using ATO (not IRS and not SARS) rules

 

See https://www.ato.gov.au/general/capital-gains-tax/international-issues/changing-residency/#BecominganAustralianresident

 

Your tax value date for ATO base cost is thus not formal emigration date, but the earliest of arrival as Permanent Resident or PR being granted while in Australia 

 

[Shampoo]

Thanks Hugo. I am in Portugal and joined this forum as it is the only one I can find for SA expats with cross border money and tax questions.

So far you have been of tremendous help and I thank you for this. 

Best, Charmaine

Edited September 7, 2017 by Shampoo