The taxpayer works and lives in the UAE, and is permanently employed there. He wishes to transfer proceeds from a retirement fund (already withdrawn and withdrawal taxes paid according to directive) from his SA personal bank account to his UAE personal bank account. For PIT his exemption is based on the DTA, as for the duration of employment his permanent home is in the UAE; visits to SA is solely for holidays with his family (child) - he has been divorced a number of years. Does the TCC under the FIA still apply so long as he remains SA tax resident (despite income exemption) even for transfers not directly related to a specific investment? (that is moving funds between his SA and UAE accounts) Is there any repatriation of funds requirements? Is a foreign investment allowance applicable?
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
This not a request that requires interpretation of any tax Act – the fact that a confirmation of the taxpayer’s compliance is required, is irrelevant for purposes of your request. The that the individual, during a prior year of assessment, ceased to be a resident of the RSA due him or her being a person who is deemed to be exclusively a resident of the UAE for purposes of the application of the agreement entered into between the two countries is also irrelevant. Based on the facts provided paragraph (b)(x)(aa) of the proviso to the definition of “retirement annuity fund’, in section 1(1)’ - a member shall, prior to his or her retirement date, be entitled to the payment of a lump sum benefit contemplated in paragraph 2(1)(b)(ii) of the Second Schedule where a member is a person who is or was a resident who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control – doesn’t apply. We suggest that the question be raised with an authorised dealer.