Financial Emigration - In my case is it worth it..

[Dalo]

Hi all

 

I have read all posts relating to financial emigration, but still need clarification please..

 

I have a PR visa (189) and will moving over to Oz permanently in a few months time.

 

I have a business in South Africa which will continue to run while I live in Oz (I own 80%, my brother owns 20% who will remain in SA and run it)

 

I have properties in SA and receive rental income from them monthly. I will always leave these assets as is in SA (for now anyway).

 

QUESTION: In order to cash in my RA, as per usual one needs to financially emigrate. I am assuming this would mean having to close off ALL of my south african bank accounts?

 

I guess what I'm asking is, can I financially emigrate purely to get my RA paid out, and not have it effect my above situation with my business and rental income in SA. eg. Where would my rental be paid into if my main bank account was closed etc.

 

Thank you!

 

 

 

 

[FingersCrossed]

Hi Dalo

 

Disclaimer: This is from my own personal research and I am not a certified financial planner / adviser / tax consultant etc. I would recommend that you do your own research and chat with a professional.

 

From my understanding, you need to wrap up all your affairs in South Africa. For example, you bank account will need to be closed (You will get a blocked account when you do the financial emigration) and you wont be able to have a South African Credit Card.

Your assets would need to be sold and you might need to pay some Capital gains tax.

I am busy going through the process now and I have to declare everything as well as state that Australia is my Primary residence and that I have no intention of returning to South Africa.

 

Hope this helps

 

[ChrisH]

Yeah as mentioned above I think you have to liquidate everything in South Africa. 

[Dalo]

Thanks guys

After speaking to a consultant it seems that you may keep your fixed property, and it does not trigger CGT. However any other shares/investments would trigger CGT (even though you still retain ownership of them).

 

Blocked account would be the only account you may use, and yes rental income may be paid into it, along with any other income you are receiving in South Africa.

 

The one disadvantage apparently is that if you decide to come back to SA within a 5 yr period, SARS will see this as a failed emigration, and you could be subject to penalties etc and would have to declare all worldwide income that you received since you left SA. If you are not going to have any extra worldwide income then this will not be an issue for you.

 

 

[LM17]

I would hang on a bit, big changes coming on this front.

 

https://www.moneyweb.co.za/mymoney/moneyweb-tax/death-knell-for-financial-emigration/

 

[Riekie]

We moved to Australia in 2004 and financially migrated in 2009.  During that time the exchange rate took a massive dive and we ended up with far less than we would have, had we done it 5 years earlier.  (Now it is even worse)!  Every dollar you make in Australia is worth R12.00.  Every Rand you make in South Africa is worth 9 cents in Australia.  Think about that. 

 

Also consider the hassle to manage and run businesses and properties in South Africa from Australia.  We had a 2nd property that we sold after a few years in Australia and the drama we had while renting it out and then selling it and all the paperwork, red tape and the process of getting the title transferred to the new owner was just not worth it.

 

Sometimes you've just got to cut your losses and take the leap it as it's probably never going to get better....