A taxpayer left the Republic of South Africa on 3 October 2019 to go to the United Kingdom (UK) . He did not pass the 183 days test for that tax year. He was present in the UK for only 149 days. His first salary was paid on the 25 October 2019. He earned in total R401 979 for the tax year ending 28 February 2020 and paid over R41 661.50 in tax for 2020. Please advise on the following: 1. Is it correct that he is liable for South African tax on this income in the UK? 2. Does the tax that he paid in the UK come into the taxation for 2020? 3. Would the 183 days be applied for that tax year because of the fact that he has not returned to South Africa? 4. He has gone for good and does not intend to return. He is going to take financial emigration. When does one apply the Double taxation agreement?
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
Before you can advise your client on these issue you will have to obtain more facts and confirm whether she is someone who is a deemed exclusively to be a resident of the UK (and on what date). You must definitely consult the RSA / UK treaty, but the also the definition of resident in section 1(1) and section 10(1)(o)(ii) of our Income Tax Act. The first one is whether the individual is a person deemed exclusively to be a resident of the RSA or the UK. You must apply Article 4 of the RSA / UK treaty. It appears highly unlikely that the person ceased being a resident of the RSA, at least for the period October 2019 to February 2020 (or 7 April). , that the individual was Under paragraph 1, of Article 14 (of the relevant treaty), and subject to the provisions of Articles 15, 17 and 18 of the treaty, salaries, wages and other similar remuneration derived by a resident of the RSA in respect of an employment exercised in the UK, then the remuneration derived therefrom may be taxed in the UK. We accepted that the income is derived from employment in the UK.