Financial Emigration Help

[Wayne Potgieter]

You can't.

yep. Hence the need to pay a professional and complete the financial migration process.

[MrJacques]

You can't. 

 

I thought you could, but with a big penalty / loss?

[Wayne Potgieter]

I thought you could, but with a big penalty / loss?

no

 

You can only touch an ra in retirement, death or financial emigration.

[Wayne Potgieter]

no

 

You can only touch an ra in retirement, death or financial emigration.

i think also major disability as well.

[Captain Fastbastard Mayhem]

I thought you could, but with a big penalty / loss?

No. As WP said above, as well as if the value is less than R 7,000. And no, you can't split it into 8 different ones in order to get each below R 7,000. Doesn't work like that. 

[Captain Fastbastard Mayhem]

i think also major disability as well.

This. Total permanent disability, technically. Though under that guise, it's treated as early retirement. The definition of Permanent Disability is also determined by the trustees and an appointed medical professional. Not tied to occupation. 

[SwissVan]

Reason why I want to FE is that in the near future our dear friends at SARS will be asking all SA citizens living abroad to pay tax on the difference they are currently paying tax in the country of residence and what they would have paid in SA. Yes it is more directed at Expats working in tax havens however I do not want to wait until no.99 and have to pay a premium to do the process.

 

 

Where did you see / hear that SARS will be doing this?

It has been running around the expat rumour mill for years now, realistically I expect at some stage it will eventually happen.

Edited January 25, 2019 by SwissVan

[WrightJnr]

My worthless 2 cents.

 

Everyone jumping on the FE bandwagon as a bit of knee jerk reaction to proposed new laws. Biggest beneficiaries at the moment is SARS, who are collecting tax on your investments as you cash out and the sharks who are “helping” you through the process.

 

Once you have your now taxed money you are either going to spend it (hope not) or reinvest it somewhere else where it might still be liable to tax in said country.

 

New tax law is complicated and has conditions. Days in country, only over one million, etc.

 

Make sure you have someone who has your best interests at heart and had simulated various paths to take for the next 10+ years.

[MrJacques]

With current exchange rates it's not that difficult to be earning more than a million randelas for people like accountants, etc.

 

I should probably just ask her, but a friend of mine did the FE but still has properties here. Not sure if she is earning rental income or not or how it would work if she sells them. I'm just thinking ahead for if I get to a similar point. This stuff is complicated!

[Sharkie 2]

Where did you see / hear that SARS will be doing this?

It has been running around the expat rumour mill for years now, realistically I expect at some stage it will eventually happen.

https://www.iol.co.za/personal-finance/expats-must-act-to-avoid-consequences-of-new-tax-law-14783867

 

 

With current exchange rates it's not that difficult to be earning more than a million randelas for people like accountants, etc.

 

I should probably just ask her, but a friend of mine did the FE but still has properties here. Not sure if she is earning rental income or not or how it would work if she sells them. I'm just thinking ahead for if I get to a similar point. This stuff is complicated!

Professional in the UK easily earns of £50k a year and will get taxed 40% on income over £46k so will this mean loosely that SARS will want another 5% of the cut to make up 45% as it is stated in the article?

[BigDL]

https://www.iol.co.za/personal-finance/expats-must-act-to-avoid-consequences-of-new-tax-law-14783867

 

 

Professional in the UK easily earns of £50k a year and will get taxed 40% on income over £46k so will this mean loosely that SARS will want another 5% of the cut to make up 45% as it is stated in the article?

Presumably there’s a requirement to spend a minimum time in SA, as someone above stated. Once you go over 100k in the UK, you lose your 11k tax free allowance, which moves the threshold for 40% to £35k. As a further complication, over £150k and your tax rates goes to 45%. Trying to work out what SA would be owed in all of that would be hectic PT.

[Bateleur1]

Where did you see / hear that SARS will be doing this?

It has been running around the expat rumour mill for years now, realistically I expect at some stage it will eventually happen.

 

Saw a news article somewhere earlier this week I think on News24.  Will look for it when I have a chance.

[GrahamS2]

A very relevant article I received recently

 

https://sanlamprivatewealth.sanlam.com/resources/fiduciary-tax/leaving-sa-what-happens-to-your-estate-plan/

[l4y3rcake]

Question on the Provident fund. If I read correctly I would be able to cash out my fund on resignation. The first R500K is taxed at 18% and thereafter the next R500k is at 21% and then anything above that 1 mil is at 32%. 

 

If my fund payout is under a mil I would be able to take that out the country without any tax implications?

[Captain Fastbastard Mayhem]

Question on the Provident fund. If I read correctly I would be able to cash out my fund on resignation. The first R500K is taxed at 18% and thereafter the next R500k is at 21% and then anything above that 1 mil is at 32%. 

 

If my fund payout is under a mil I would be able to take that out the country without any tax implications?

Hey L4y3rcake, 

 

ONLY if you're over 55. If you resign and cash it in (which you can also do with a pension fund) you'll be taxed according to the WITHDRAWAL tax tables, in which only the first R 25,000 is tax free, and up to R 660k is taxed at 18% and so on. 

 

So yes, you can withdraw when you resign, but you won't have the same level of tax free capital that a retiree would have. 

 

Tax tables on a lump sum withdrawal :

R 0 – R 25,000                                         -  Lump sum tax free

R 25,001 - R 660,000                              -  18% of the amount above R 25,000

R 660,001 - R 990,000                            -  R 114,300 plus 27% of the amount above R 660,000

R 990,001 and above                              -  R 203,400 plus 36% of the amount above R 990,000

 

Tax tables on a lump sum retirement :

R 0 – R 500,000                                                   -  Lump sum tax free

R 500,001 - R 700,000                                         -  18% of the amount above R 500,000

R 700,001 - R 1,050,000                                      -  R 36,000 plus 27% of the amount above R 700,000

R 1,050,001 and above                                        -  R 130,500 plus 36% of the amount < R 1,050,000

Edited February 17, 2020 by Captain Fastbastard Mayhem

[IceCreamMan]

Presumably there’s a requirement to spend a minimum time in SA, as someone above stated. Once you go over 100k in the UK, you lose your 11k tax free allowance, which moves the threshold for 40% to £35k. As a further complication, over £150k and your tax rates goes to 45%. Trying to work out what SA would be owed in all of that would be hectic PT.

 

Some things have just become perfectly clear now. Thanks