Clarification on PIT Registration for Non-SA Tax Resident Inheritor

Clarification on PIT Registration for Non-SA Tax Resident Inheritor

• 06 February 2025
• Individuals Tax
• The Tax Faculty Tax Specialist

This article is based on tax law for the year ending 29 February 2025.

Question:

I have a client who moved to the UK immediately after completing their studies and never registered for Personal Income Tax (PIT) in South Africa. They are now in their 50s and are set to inherit a substantial amount from a South African tax resident. As part of the inheritance process, they will need to register for PIT in South Africa, despite being a non-South African tax resident.

We are considering using the eFiling profile registration process, which should also facilitate their PIT registration. However, we want to ensure that SARS correctly recognizes their non-resident tax status from the outset.

Given that they will likely use their UK passport for registration, we understand that a foreign passport alone does not determine tax residency status. How should we formally indicate their non-South African tax residency during the PIT registration process to SARS?

Answer:

1. The Problem / Facts

How can a non-South African tax resident, who needs to register for Personal Income Tax (PIT) in South Africa to manage an inheritance from an SA tax resident, correctly indicate their non-resident tax status during the SARS registration process?

2. Applicable Law

N/A

3. Application of the Law to the Facts

• Do not register for tax in South Africa if the individual is inactive on the SARS system.
• If the inheritance is less than R10 million, the estimated cost is around R4,500. If it exceeds R10 million, the estimated cost is around R12,500, as SARS approval is required.
• The executor must provide a mandate, and the legatee should not be paid directly.
• Required documents:
  • UK tax residency certificate
  • UK passport
  • Proof of departure date from South Africa or proof of arrival in the UK, such as an employment letter or proof of the commencement date of UK social security contributions.
  • If the above is unavailable, a UK Tax Residency Certificate (TRC) for the first UK tax year and a TRC for April 2024 or April 2025.

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