What does a natural person need to do in order to emigrate financially from South Africa?
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
This is not really an issue that requires interpretation of tax legislation.
It is our understanding that the term ‘financial emigration’ is the process whereby a South African resident changes his or her status with the Reserve bank to a non-resident. The RSA Reserve Bank guide refers to ‘individuals regarded as residents by the Financial Surveillance Department who are leaving South Africa to take up permanent residence in any country outside the CMA’ – paragraph 4.1. Paragraph 4 of the guide deals with the process to be followed in this regard. As was said earlier, it is not a tax related issue and best referred to an authorised dealer.
Taking up permanent residence in another country will mean that the person doesn’t intend to return to the RSA and that the person ceased to be ordinarily resident in the RSA, and consequently ceased to be a resident of the RSA (for tax purposes). Under section 9H(2)(i) of the RSA Income Tax Act, the person is then treated as having disposed of each of that person’s assets to a person that is a resident on the date immediately before the day on which that person so ceases to be a resident for an amount received or accrued equal to the market value of the asset on that date …