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R10m SARS process now the same as the R4m FIA process

sars r10m

Formal Emigration – Not advisable for all!

Formal Emigration – Not advisable for all!.

First publisched by: http://www.bcbadvisory.com/formal-emigration-not-advisable-for-all/

Formal or financial emigration is the process to formally change your exchange control status from resident to non-resident. It is also sometimes known as Excon Exit.

Financial emigration will not affect a South African’s right to retain their South African citizenship or dual citizenship. It is thus a purely financial process.

Following financial emigration from South Africa, a person can remain tax resident in SA, based on the time spent in the country and subject to the double taxation agreement (DTA) in which the person will be living in future.

Tax emigration or exiting the SA tax system is not subject to formal emigration.

It is a complex process and not advisable for all, but why would one consider the options? What will be the costs?

The process

Before a person can start the process of formal emigration his/her tax affairs must be in order and up to date, as a tax emigration clearance certificate from SARS is needed to get the ball rolling.

As soon as a tax clearance certificate is obtained from South African Revenue Service (SARS), an application is lodged through a South African Bank also known as an authorised dealer (AD) of the SA Reserve Bank (SARB). All assets need to be declared to SARB. The AD then applies at the South African Reserve Bank for an Exchange Control Approval Number (ECA) where after a blocked account is opened alternatively an existing account is converted into a blocked account. Each immigrant may have only one blocked account.

Once the emigration process has been completed, capital transfers have to flow offshore via this ‘blocked’ account.

Capital acquired and income earned post formal emigration need not flow through this blocked account. Typically inheritances received once you have been formally emigrated can be paid by the executor to you foreign bank account.

Should you only leave a pension or living annuity behind, there is no need for a blocked account as the fund can pay directly to your foreign bank account.

Funds allowed to be taken out of South Africa

The South African Reserve Bank allows emigrants the following facilities:

Foreign Capital Allowance (FCA) – R10 million per adult per calendar year or R20 million per family unit per calendar year.

In the year of actual departure, a travel allowance of up to R1 million per adult and R200 000 per child under the age of 18 years is allowed. The travel allowance may not be accorded more than 60 days prior to departure; and

Export of household and personal effects, motor vehicles, caravans, trailers, motorcycles, stamps, coins and minted gold bars (excluding coins that are legal tender in South Africa) within an overall insured value of R2 million.

Any remaining assets in South Africa will be blocked, but can be used for locally for any purpose and more recently SARB will allow listed and unlisted equities to be transferred out of SA as part of your annual R10m FCA.

What BCBA can do for you

Many service providers focus on formal emigration or retirement annuities only. They therefore encourage clients to formally emigrate. In fact, formal emigration services are sold as a free consultation.

The days, if it ever existed, of free lunches is long gone.

Not only can you personally manage the formal emigration process, you can often legally avoid the cumbersome process

For certain clients, formal emigration is often the only option available for the cost of a telephone conference (R969). We will be able to analyse your position and suggest the best solution.

Where clients so elect, we will complete the entire formal emigration process on their behalf. The process will be explained to you in detail and once again, we facilitate the free flow of funds. Your SA Rand will at all times remain under your own control.

BCBA will also be able to assist and advise you on how funds from the blocked account can be accessed.

For clients with “trapped” retirement annuities, preservation funds and so called living annuities, BCBA will provide the necessary guidance and where required, we will facilitate with or without formal emigration.

You formally emigrated and need advice or a second opinion? Call on us and we will assist and guide you in the right direction.

Clients having inherited funds or assets need not formally emigrate. There may be a cheaper and easier alternative.

For more information in your unique circumstances, please contact Hugo van Zyl athugo@bcbadvisory.com

Rykes waai in hul hordes: ‘Wurggreep van geldreëls’ dwing hulle uit SA

Rykes waai in hul hordes: ‘Wurggreep van geldreëls’ dwing hulle uit SA

Source: Rapport Deur Pieter-Louis Myburgh Sondag 05 Oktober 2014 3:07 nm.

Ryk Suid-Afrikaners emigreer in hul hordes omdat hulle vertroue in die land se ekonomie verloor het.

Voorts is Suid-Afrika se “ar­gaïese” valutabeheerstelsel, wat veronderstel is om te verhinder dat te veel geld die land verlaat, ’n groot rede vir dié valuta-uittog.

Rapport het met drie finansiële praktisyns gepraat wat mense met hul geldsake help wanneer hulle emigreer of geld in die buiteland wil belê.

Al drie sê al hoe meer welvarende en hoogs opgeleide Suid-Afrikaners neem hul geld en vaardighede na die buiteland.

Dit kom nadat die Suid-Afrikaanse internet-miljardêr en ruimtereisiger Mark Shuttleworth die afgelope week ’n geskiedkundige sege teen die Suid-Afrikaanse Reserwebank in die appèlhof behaal het.

Die bank is beveel om die R250 miljoen wat Shuttleworth in 2001 onder protes moes betaal om sy fortuin van meer as R4 miljard na die buiteland te skuif, aan hom terug te betaal.

Shuttleworth het aangekondig hy gaan die geld in ’n trust belê om ander Suid-Afrikaners by te staan wat die regering oor grondwetlike kwessies in die howe wil pak.

“Miljarde der miljarde rande verlaat tans die land saam met welvarende Suid-Afrikaners wat emigreer,” sê Michael Honiball van die regsfirma Webber Wentzel se belastingafdeling.

Die presiese bedrae wat die land verlaat, is onbekend en die Reserwebank wou nie dié besonderhede aan Rapport beskikbaar stel nie.

“Kragtens art. 33 van die Suid-Afrikaanse Reserwebank-wet kan die Reserwebank nie hierdie inligting deel nie,” het Hlengani Mathebula, die bank se woordvoerder, in sy reaksie per e-pos geskryf.

Honiball sê dit is baie kommerwekkend om te sien in watter getalle welvarende Suid-Afrikaners die land verlaat.

“Dit is mense wat werk hier skep, ons het hulle nodig. Maar die wurggreep van (ekonomiese) regulasies waarmee ons hier moet worstel, dwing hulle om oorsee te gaan sake doen,” sê Honiball.

Hy kry veral te doen met plaaslike entrepreneurs wat hul maatskappye soms vir honderde miljoene rande verkoop en dan met hul fortuin na die buiteland trek.

Ryno Viljoen, stigter van die maatskappy Cashkows, sê hy kry nou tot 150 aansoeke elke maand van mense wat die land wil verlaat.

“Dit is skrikwekkend,” sê ­Viljoen. Hy hanteer kliënte wie se bates enigiets tussen R20 000 en R200 miljoen beloop.

Volgens Viljoen voel welvarende Suid-Afrikaners genoop om die land te verlaat omdat daar onsekerheid is oor kwessies soos eiendom- en grondregte.

“Dit het vir hulle meer sin om hul kapitaal na die buiteland te skuif,” sê Viljoen.

Hy is skepties oor die uitwerking van veldtogte wat Suid-Afrikaners in die buiteland aanmoedig om terug te kom.

“Uit my eie ervaring kan ek sê daar is baie min mense wat terugkom,” sê Viljoen.

Hugo van Zyl, ’n belastingpraktisyn wat in internasionale transaksies spesialiseer, sê net die pensioene van sy kliënte wat reeds oorsee is, beloop elke maand R9 miljoen.

Hy sê die Reserwebank se streng reëls oor intellektuele ­eiendom, waarvolgens Suid-Afrikaners nie patente in die buiteland kan registreer nie, dryf baie innoverende individue landuit.

“Hulle gaan doen hul navorsing oorsee in plekke soos Silicon Valley (in die VSA),” sê Van Zyl.

Honiball sê Suid-Afrika skiet homself in die voet met sy ar­gaïese valutabeheerstelsel.

“Dink logies daaroor. Watter land ter wêreld laat jou nie toe om jou eie geld landuit te neem soos jy dit goeddink nie?

“Alle lande het in ’n mindere of meerdere mate valutabeheer, maar Suid-Afrika is die laaste land ter wêreld wat só streng is,” meen Honiball.

 

Stellenbosch / USA / UK / Australia – Contact Details

  • USA                      +1-818-924 5001
  • Australia           +61(0) 3 9013 5001
  • For the other countries download the business cardhugo_business_card_2014

“PROJECT DO IT” MAY BE YOUR COME OUT OF JAIL CARD FOR SA EXPATS IN AUSTRALIA

hugovz@iafrica.com

hugovz@iafrica.com

DO IT BEFORE 19/12/2014 = FORMALLY EMIGRATE NOW AND WRAP UP YOUR SA TRUST SOONEST

IT’S A MATTER OF TIME SA TRUST BENEFICIARIES LIVING IN AUSTRALIA WILL BE HARSHLY TREATED AS TAX CHEATS WARNS THE ATO.

The ATO (the Australian Taxation Office) recently announced and published significant PROJECT DO IT information on the tax amnesty for foreign assets held in own or trust / entity name.

As of 1 March 2014, South Africans can now emigrate or exit their SA private company to be owned directly below an Australian trust or even better below an Australian Hold Co, either owned by an Australian trust or in certain cases as a subsidiary of a self managed Super.

More detail can be found on the more recent blog – just follow the link

Hugo may not advise on the Australian structure yet can ensure the trust is properly dissolved (where advisable and legal). I am Hugo van Zylquite willing to run this past the various families and what is important to IRM’s is that most South Africans in Australia incorrectly reported in SA and Australia i.e. they may need to do a VDP (voluntary disclosure or amnesty like) application in South Africa before or simultaneously with the ATO’s project DO IT.

Where there is a tax refund in SA, VDP will not be applicable as VDP is only where there is a tax due on revision or update.

Feel free to contact me should have questions.

See Me On TaxConnections

Debugging theNew Zealand tax amnesty on Foreign Superannuation Funds from South Africa

Debugging the IRD tax amnesty on Foreign Superannuation Funds from South Africa.

Synopsis for quick reading

The foreign investment fund (FIF) rules which intended to tax interests in foreign investments on an annual basis, was generally ignored by most immigrants. As of 1 April 2014 FIF and other complicated rules will no longer apply to interests in foreign superannuation

  •  South African Pension Funds as well as Retirement Annuity       Funds qualify as foreign Supers

·   IRD (the NZ version of the South African SARS) rules in respect of foreign lump sums are changing on 1 April 2014

·         Due to the changes NZ Government announced an amnesty that ends on April 1st yet, they have effectively extended this deadline to include all applications (o withdraw from the Super) were filed prior to 1 April 2014 provided the encashment date / entitlement or accrual is reported no later than in the 2014-15, i.e. lump sum must be encashed by 31 March 2015.

·         If you elect the amnesty only 15% of the lump sum is taxed and for the highest earners,  the effective tax rate is 5% on the lump sum, which is far less than the SA taxes withheld at source;

·         SA taxes qualify for a tax credit in NZ – effectively the amnesty will cap your IRD tax at the taxes paid to SARS on encashment

·         You can leave the funds in ZA Rand and transfer when, and if the exchange rate improves. No need to convert and send to NZ to qualify for the amnesty

·         If you elect not to use the amnesty, you need do nothing until you cash in, as there is no longer an annual IRD tax on unrealised FIF growth

·         You need not transfer to a Kiwi Saver but if you did,  you can withdraw  the IRD taxes from the Kiwi Saver

·         SA expats living in NZ for less than 4 years can continue to enjoy the “transitional resident rules” which provides for a 4-year exemption on SA lump sum and other income from SA sources.

·         As a general guideline, you need to be in NZ more than 7 years before the 15% amnesty inclusion rate is beneficial. On 7 years the effective tax rate is less than 5% whereas in the 8the year the effective rate jumps to near 7%. But this is not the only test to be done. If SARS taxed you at an effective rate of 25% (near R1.4m RA lump sum) then amnesty is probably not worth it until you reach your 18th taxed year in NZ i.e. 22 years of stay  (NZD 155 555 x 75.17 x 33.33% tax = NZD 38 973 which equals 25.05%). The minute any one of the monetary issues change the number of years could be substantially less.  For smaller amounts the number of years reduces substantially

·      Expressed differently: the new IRD foreign lump sum regime is so favourable, no SA expat living in NZ should could use the fear for additional IRD tax an excuse to delay claiming ownership of their cash bag trapped in SA RA fund.

 In short, it is time to speak to us. Ensure you consider the true facts, make the right decision and to ensure the magical 4 year tax exemption opportunity is not missed, and if you have been in NZ for more than 48 months consider the benefits of the amnesty and send that request to encash your SA RA or pension fund,   before 1 April 2014. Still unsure how to go about? Provide us with the necessary mandate and we can kick-start the process on your behalf, alternatively for a small fee we provide you with the template letter to be sent.

 

 

Ex-pat Pensioners enjoy Exchange Control Freedom

On our Exchange Control Blog we posted an interesting Exchange Control update (Circular 4 of 2014) refers. See http://wp.me/P4efR1-q

In short:

Ex-pat Pensioners residing abroad (not having formally emigrated) can now extract their monthly pension and retirement annuity income from South Africa (SA) without the need of a tax clearance certificate, despite living abroad as so called temporary non-residents.

TAX ISSUES

UK resident ex-pat pensioners must take note of their NDR status and the tax consequences of remitting SA pension to the UK.

UK, USA, Australia and New Zealand ex pat pensioners may need to avail to treaty benefits to extract their pensions tax free from SA.

Should you need help complete the section below and we will be in contact.

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