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Why the wait when you emigrate?
- 20 November 2020
- Karen van Wyk
Most of us know someone who has emigrated or is in the process of emigrating. When making a fresh start in a new country with no intention of returning to South Africa (other than for purposes of visiting family or enjoying our wonderful beaches), a person will in most instances want to take all his/her resources and capital with him/her, including retirement fund benefits.
With effect 1 March 2019 legislation allowed a resident who emigrated from the Republic to withdraw a lump sum benefit from a retirement annuity fund, pension preservation fund and provident preservation fund where such emigration is recognised by the South African Reserve Bank (SARB) for exchange control purposes.
With effect 1 March 2021, a person will now only be able to take a withdrawal lump sum benefit (from a retirement annuity fund, pension preservation fund and provident preservation fund) if he/she is a person who is not a resident for an uninterrupted period of three years or longer on or after 1 March 2021. Therefore, a three year waiting period now kicks in before a person emigrating from South Africa will be able to withdraw from these retirement funds. This will, without a doubt, negatively impact those trying to build a new life in another country with capital (in the form of retirement annuity fund, pension preservation fund and provident preservation fund benefits) being trapped in South Africa and having to wait three years for it to be released.
Webinar Commentary
For more information on the impact of this and other amendments, watch our annual Tax Update workshop presented by Prof Jackie Arendse here.