Barnone Posted April 6, 2006 Report Share Posted April 6, 2006 Hi EveryoneI am aware that the amounts that can be taken out of the country(SAfrica) have just been increased but am not clear on how one qualifies under each caterogy & the rules pertaining to the Annual Forex Allowance vs Emmigration Allowance vs Foreign Investment Allowance.Am a little confused regarding the amount of money (& under what SA law) one is allowed to take out of the country if on a Temporary Residents Visa to Australia ... we(I am applicant plus wife & 2 kids) have applied for VISA under the Business Skills - Business Owner subclass 160 which gives us 4 years in which to buy or start a business and achieve the turnover, assets & employment of Australians requirements necessary to apply for PR under the Business Skills - Business Owner subclass 890 but we cannot apply for PR for the 1st 2 years after being granted the TR...either way we are going to need money (probably a lot more than one can take out using the annual business allowance can I use Foreign investment allowance for this purpose ?Has anyone here gone to or is (or knows someone who has/is) going to Aussie under the Business Skills - Business Owner subclass 160 or 163 ? I would also welcome the comments of others who have gone on TR visa & how they got money out ...Thanks to all of you who so generously share your experiencesCheersD Quote Link to comment Share on other sites More sharing options...
Cindylou Posted April 6, 2006 Report Share Posted April 6, 2006 Hi BarnoneIf you are not going to formally emigrate then you are allowed to transfer your foreign investment allowance (R2m per SA res over 18) for unrestricted use abroad. (obviously you'll need a tax clearance for this.)You can still emigrate officially despite only having a TR visa. If you do emigrate you can take R160k per family member over 12, R50k per family member under 12, household goods to the value of R1m and capital transfer of R4m per family. Thereafter you can apply for the balance of your funds subject to a 10% levy (bottom feeders!)Cindylou Quote Link to comment Share on other sites More sharing options...
Barnone Posted April 6, 2006 Author Report Share Posted April 6, 2006 Thanks Cindylouone or two more little queries with regards the emmigration allowance...if after 4 yrs of TR for whatever reason we return to SA is there any penalty etc etc ? someone mentioned that for tax reasons it is best to "relocate" but I am now thoughly confused ...maybe best to use the foreign investment allowance to invest in a Company & I think we are allowed to take 160 000 pp / year on an international travel allowance ? unluckily we don't fall into the category where the bottom feeders are allowed to have a 2nd course !but the the jury is still out on the best method to take out our hard earned rands (all tax has been paid already !)look forward to all those repliesD Quote Link to comment Share on other sites More sharing options...
Cindylou Posted April 6, 2006 Report Share Posted April 6, 2006 Hi DAs far as I am aware, the money can stay as a foreign investment, but the assets (the R1m household goods) will need to be repatriated (or the funds from the sale thereof), this also applies if you take goods out when you relocate. The benefit of going the emigration route is that if you take all your assets with you your tax file is closed. If you relocate then you're tax file remains open and you have to prove your non res status in order to obtain tax exemption on foreign income.Usually people say that the "relocate" option is easier, as then you don't need to go through all the tax clearance hoops, but you'll still need the tax clearance certificate in order to make the foreign investment. Remember also that in order to get your R160kpa you'll need to have a return ticket and come back to the country anualy to collect it - oh the life of a jetsetter!C Quote Link to comment Share on other sites More sharing options...
Cindylou Posted April 7, 2006 Report Share Posted April 7, 2006 Sorry, I also meant to add that the excon regulations are getting less onerous - as can be seen from this year's increase in the foreign investment and emigration allowances. The Reserve Bank has stated that they aim to remove exchange controls completely in the future, so in four years we should expect the regulations to be less strict than they are at present, which would also benefit those people who have previously emigrated. Quote Link to comment Share on other sites More sharing options...
Barnone Posted April 22, 2006 Author Report Share Posted April 22, 2006 (edited) Hi CindylouI hope you are well & enjoying all the "short" weeks we are having here.Thanks for your input on the Money issues discussion forum especially, you are so knowledgable, does this for part of your job description ? I was going to follow up the info in the above posts in a PM but thought that just maybe there are others out there who are able to take more than their suitcases with them to Aussie I still haven't figured the best route for us personally, but it is looking as though "relocation" is the best option at the moment, especially if the laws are relaxing with time. Perhaps can you point me in the direction of where to find the relevant info in the SARS website ... unless you can shed some light on the issue of the Foreign Investment Allowance & "relocation" ? Does one have to pay tax in SA on the income from the Investment Alllowance ? What happens when we finally get PR/citizenship in Australia ? does the money then fall into the emmigration Allowance ? Also been told that if we emmigrate and we subsequently receive money from a will this will not be taxable but if we are relocators it is taxable ? my wife has some funds which were left to her by her late father but the funds are at present part of a usufruct?? what happens in this situation if we emmigrate ?Anyone else got some experience/opinions on the Emmigration vs Relocation debate ?Look forward to hearing your opinions ...even if it is not what I want to hear CheersD Edited April 22, 2006 by Barnone Quote Link to comment Share on other sites More sharing options...
Cindylou Posted April 23, 2006 Report Share Posted April 23, 2006 Hi DThanks for the pat on the back - I am in the financial sector, but also have been involved with the immi story for a long time. My brother and his family left SA in 2000, my mom in 2004 and my dad (who's a bit of a money guru) and I are still in SA so we have both had a lot to do with assisting them with their financial decisions. Also, I've been in the planning stages of Aus immigration for about three years so I've tried to keep up to date. I'd like to answer your questions in detail, and so ask for your indulgence over the weekend - what little grey matter is still left tends to go awol - and will post a reply during the week if you don't mind.Enjoy your dayCindy Quote Link to comment Share on other sites More sharing options...
Barnone Posted April 24, 2006 Author Report Share Posted April 24, 2006 (edited) Hi CLWOW you are experienced ! No worries ...we can wait untill you are in the mood (though "patience" was the name of my nanny ) we still have a long way to go (at least 6 months till we hear if we have our TR visa) before we need to decide on our exit strategy !Also wanted to say I am finding it difficult enough to concentrate at work having made this decision so tend to comb the site & post at nite & after hrs but have sneaked a skelm now during working hrs !!! so I guess I am getting impatient with the speed things are happening ... no Q4U to get you way to the front of the Queue at DIMIA !Please keep up the postings they are most interesting & helpful.Best D aka -0 (barnone ...gedit ?) Edited April 24, 2006 by Barnone Quote Link to comment Share on other sites More sharing options...
Cindylou Posted April 24, 2006 Report Share Posted April 24, 2006 Hi –O The debate in terms of tax is not emigrate / relocate, but rather resident / non-resident.Simply put: The SARS uses “Resident Based Taxation” to calculate income tax and non-residents do not pay tax on Income. Non-residents are, however, still liable for Capital Gains Tax (CGT) for e.g. proceeds of sale of shares or property will attract tax. This then covers income earned in Aus as well as proceeds of the estate – you need to “fail” the residence test in order not to be taxed on it. See Resident: Definition in relation to a natural person – ordinarily resident and Resident: Definition in relation to a natural person - physical presence test When you emigrate your Emigration Allowance is reduced by the amount of any transfers under the Foreign Investment Allowance i.e. if you & your wife each use your full R2m Foreign Investment Allowance then you do not have any remaining Emigration Allowance to utilise in the future. But, as I said previously it is the Reserve Bank’s stated objective to remove excon completely at some point. Also, those people who emigrated in the past and were restricted to a max of R750 000 or R1.5m are now able to apply for the difference between the old amount and new (R1.25m or R2.5m) You may want to look at the Reserve Bank site SARB to see the latest Excon Regulations (Click SARB activities > Exchange controls > Exchange Control Publications)You may find that you want to get a “tax guru” to advise you, however, if you are prepared to trawl through the two websites and can translate the legalese then I do believe you’ll find answers to any queries you may have. The SARS site has a useful Q&A link and you can email queries to khanyi[at]sars.gov.za - the response time is a couple of days.Good luck with the TR Application - I'm going PR route and presently that takes 9 months, so I know what you mean about getting impatient! When my brother went the waiting time was over two years - thank goodness things have improved Cindy Quote Link to comment Share on other sites More sharing options...
DebL Posted August 20, 2006 Report Share Posted August 20, 2006 Hi EveryoneI am aware that the amounts that can be taken out of the country(SAfrica) have just been increased but am not clear on how one qualifies under each caterogy & the rules pertaining to the Annual Forex Allowance vs Emmigration Allowance vs Foreign Investment Allowance.Am a little confused regarding the amount of money (& under what SA law) one is allowed to take out of the country if on a Temporary Residents Visa to Australia ... we(I am applicant plus wife & 2 kids) have applied for VISA under the Business Skills - Business Owner subclass 160 which gives us 4 years in which to buy or start a business and achieve the turnover, assets & employment of Australians requirements necessary to apply for PR under the Business Skills - Business Owner subclass 890 but we cannot apply for PR for the 1st 2 years after being granted the TR...either way we are going to need money (probably a lot more than one can take out using the annual business allowance can I use Foreign investment allowance for this purpose ?Has anyone here gone to or is (or knows someone who has/is) going to Aussie under the Business Skills - Business Owner subclass 160 or 163 ? I would also welcome the comments of others who have gone on TR visa & how they got money out ...Thanks to all of you who so generously share your experiencesCheersDHi D,We are also very confused about the difference between relocation and emigration and tax clearance certificates. We are also going to Aus on a business visa and intend leaving at the end of November. Have you found out the best way to get your money out? I am terrified that the banks will freeze our accounts should we start making enquiries.Also does anyone know how you get the balance of retirement annuities (after the 1/3 has been paid out) into Aus? Do you have to go through exchange control all the time?The web site is fantastic, it's very comforting to know that we are not the only people that are confused!RegardsDebL Quote Link to comment Share on other sites More sharing options...
Cindylou Posted August 20, 2006 Report Share Posted August 20, 2006 Hi DebLI guess these must be the two most queried subjects in this section of the forum. At the risk of sounding rude to a newbie I'm going to refer you to the threads that apply: look here and hereIn brief: You will need a tax clearance to take out anything in excess of your annual travel allowance. If you have been a good little citizen this is v easy to obtain.If you formally emigrate you can request EXCON approval from SARB for your RA to be paid directly to a nominated off shore bank account.The bank is not allowed to freeze your bank accounts just because you make enquiries. If you speak to the correct person (can be quite hard to find) they will be able to give you some advice.If anything is unclear and you'd like more detail please don't hesitate to ask and questions.In closing, welcome to the forum DebL and good luck with your prospective move.Cindylou Quote Link to comment Share on other sites More sharing options...
DesertDaisy Posted August 20, 2006 Report Share Posted August 20, 2006 If you need a tax guru based in SA barnone, I can refer you to one! Quote Link to comment Share on other sites More sharing options...
conroys Posted August 21, 2006 Report Share Posted August 21, 2006 Hi,Having read the above, I am a bit confused. One of the previous posts said: If you do emigrate you can take R160k per family member over 12, R50k per family member under 12, household goods to the value of R1m and capital transfer of R4m per family.and a further post said:When you emigrate your Emigration Allowance is reduced by the amount of any transfers under the Foreign Investment Allowance i.e. if you & your wife each use your full R2m Foreign Investment Allowance then you do not have any remaining Emigration Allowance to utilise in the futureUnder the first post it seems to me you can take more than R4m per family. That is:R160k per person above 12 PLUS R50k per person under 12 PLUS R1m household goods PLUS capital transfer of R4m. So my first question is: Did I read it the right way, then you can take more than the ammount in your foreign investment allowance or can you take a maximum of R4m per family on the emigration allowance, with sub quotas for household goods, etc.My second question is: I assume after you have received an emmigration allowance, you cannot use the travel allowance any more? But can you use the travel allowance after you have received a foreign investment allowance? And if so, can you receive both in the same year?Regards.Jack Quote Link to comment Share on other sites More sharing options...
JohanK Posted August 21, 2006 Report Share Posted August 21, 2006 Hi DAs far as I am aware, the money can stay as a foreign investment, but the assets (the R1m household goods) will need to be repatriated (or the funds from the sale thereof), this also applies if you take goods out when you relocate. The benefit of going the emigration route is that if you take all your assets with you your tax file is closed. If you relocate then you're tax file remains open and you have to prove your non res status in order to obtain tax exemption on foreign income.Usually people say that the "relocate" option is easier, as then you don't need to go through all the tax clearance hoops, but you'll still need the tax clearance certificate in order to make the foreign investment. Remember also that in order to get your R160kpa you'll need to have a return ticket and come back to the country anualy to collect it - oh the life of a jetsetter!CHi Cindy One don’t need the return tickets for the R 160 I used mine, my wife’s and my daughters for the year of 2006 and only had one way tickets to supply the bank with and they had no problem with it. I made use of the full R 370000.00 travel allowance and applied for a tax clearance for foreign investment of witch I only used a small amount. The bank took my foreign investment clearance and will keep it on record. I still earn some money in South Africa and to my knoll age the certificate is only valid for one year so I will make a transfer of money again in January 2007 made sure 2 people in Sa received full sighing authority on my account you must just make sure who you give this to. Quote Link to comment Share on other sites More sharing options...
Cindylou Posted August 21, 2006 Report Share Posted August 21, 2006 OK - firstly Jack: when you leave either way you are allowed to take your annual travel allowance per person and goods to the value of R100k. If you choose to invest overseas then you can invest a max of R2mio per adult. If you choose to emigrate then you can take R4mio per family LESS any existing foreign investment . If you choose to relocate then you cannot access the R4mio, regardless of whether or not you have a foreign investment.Secondly - JohanK, unless the rules have changed, you may not access your travel allowance from overseas. The theory is that if you are working overseas you have enough money to live on and therefore do not require a travel allowance. If you do manage to get your money I would advise you not to tell people about it (shhh)CheersC Quote Link to comment Share on other sites More sharing options...
conroys Posted August 23, 2006 Report Share Posted August 23, 2006 Thanks C, it really helps to have someone knowledgable to ask some questions... Some further questions on the same topic:1. You can take R2m per person on a foreign investment allowance. What is regarded as a foreign investment? In other words, what can you do with that money? Can you buy a house? Can you transfer it to a bank account and use some of that money while in Asutralia? Are there any guidelines to what constitute a investment and what not?2. The 10% levy payable if you want to take more than your allowance, is that only applicable to the emmigration allowance or to foreign investment as well?3. Can you still use the travel allowance after using the foreign investment allowance?Thanks.Jack Quote Link to comment Share on other sites More sharing options...
Cindylou Posted August 23, 2006 Report Share Posted August 23, 2006 Hi Jack (you must be sick of that one!)1. Once you've transferred the money into a foreign bank account you can do whatever you want with it. (However, did you know that SA residents are not allowed to play foreign lotteries?)2. The 10% levy only applies if you apply to take out funds IN EXCESS of the allowable amount. (in other words, more than R2 mio per adult or R4mio per family)3. YesCheersC Quote Link to comment Share on other sites More sharing options...
Dreamcatcher Posted August 23, 2006 Report Share Posted August 23, 2006 (However, did you know that SA residents are not allowed to play foreign lotteries?)Hi Cindylou,I was wondering about that. Where can I find it in writing? I want to cure some people I know of playing lotto I have nothing against it, I just don't like it when your life starts revolving around a few numbers.Greetings,Dreamy Quote Link to comment Share on other sites More sharing options...
Cindylou Posted August 23, 2006 Report Share Posted August 23, 2006 Hi DreamyYou can check out the SARB site, section G, page 4 - but this only applies to SA Residents, not SA Citizens! Cheers,C'Lou Quote Link to comment Share on other sites More sharing options...
Sulona Posted August 24, 2006 Report Share Posted August 24, 2006 Ok time to admit that I'm an attorney and like my dad always say there is nothing more scary than an attorneys logic when it comes to taxes (sorry for the tax attorneys out there, I know they study very hard to be able to provide their clients with great advice, I'm talking about the average attorney.) After reading and re reading all the above posts I'm really glad my dad is my accountant Sulona Quote Link to comment Share on other sites More sharing options...
DesertDaisy Posted August 24, 2006 Report Share Posted August 24, 2006 Well in our case, it makes no real difference. We are unlikely to ever have enough money to reach the maximum limits anyway.... Quote Link to comment Share on other sites More sharing options...
DebL Posted August 27, 2006 Report Share Posted August 27, 2006 Hi Cindylou,Thanks for the info. Now I have a few more queries.Can anyone recommend a good freight company? Also we were going to replace our appliances with new ones to take with, but have since heard that we may have to pay import duty if the goods are less than a year old. Is this so?Can't wait to get to Aus. The house is sold and have resigned from work but boy the stress of deciding what to take, what to throw out!! This is my confused face! We are also thinking of making a stop over in Singapore on the way to Perth, can anyone recommend alternatives or goood tours. Now, it's a decision of straight there or bit of a holiday on the way Look out Aus, we're almost there!RegardsDebL Quote Link to comment Share on other sites More sharing options...
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