Currently I am tax resident in Switzerland but still pay tax in South Africa based on my investment properties and shares in an investment company. I have not officially emigrated as per the SA Reserve Bank. I have SA and British citizenship.
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We accept that you are deemed exclusively a resident of Switzerland. Article 4(2) reads as follows:
“Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then that individual’s status shall be determined as follows:
a) the individual shall be deemed to be a resident solely of the State in which a permanent home is available to the individual; if a permanent home is available to the individual in both States, the individual shall be deemed to be a resident solely of the State with which the individual’s personal and economic relations are closer (centre of vital interests);
b) if sole residence cannot be determined under the provisions of subparagraph (a), or if the individual has not a permanent home available in either State, the individual shall be deemed to be a resident solely of the State in which the individual has an habitual abode;”
c) if the individual has an habitual abode in both States or in neither of them, the individual shall be deemed to be a resident solely of the State of which the individual is a national;
d) if the individual is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.”
In terms of article 6 “income derived by a resident of a Contracting State from immovable property … situated in the other Contracting State may be taxed in that other State.” So, both the RSA and Switzerland has a right to tax this. Article 13(1) also provides that “gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.”
Gains from the alienation of any property other than that referred to in the preceding paragraphs of this Article, shall be taxable only in the Contracting State of which the alienator is a resident. We suspect that the ‘policies’ may fall under this.
You will be well advised to raise these questions with tax specialists in Switzerland and the RSA.