• Home
  • Disclosure Notice
  • Terms and Conditions of Use
Tel: +27 33 392 7250
Your wealth - Our concern
facebook
linkedin
email
  • Home
  • About us
    • Our Background
    • Our Philosophy
    • Our People
    • Our Values
  • Our Services
    • Business Assurance
    • Estate Planning and Tax Services
    • Global Investment Advice
    • Offshore Company and Trust Services
    • Regular Seminars
  • News & Reviews
  • Tricks & Traps
    • Alternative Investments
    • Estate Duty
    • Exchange Control
    • Offshore Mutual Funds
    • Risk Profiling
    • SA Citizenship – Issues for Emigrants / Expats
    • SA Exchange Control Residency – Issues for Emigrants / Expats
    • SA Tax Residency – Issues for Emigrants / Expats
    • Trusts – A Basic Overview
    • Glossary of Investment Terms
  • Contact Details
  • Links
    • Admin login

SA Exchange Control Residency – Issues for Emigrants / Expats

In the previous two editions of our newsletters I tackled the problems confronting SA Citizenship and SA Tax Residency rules.  In this the final part to the series I deal with Exchange Control.

Exchange Control Residency is perhaps the simplest of all the concepts. The South African Reserve Bank [SARB] takes the view that once a resident for exchange control [whether by birth or naturalisation] you remain a resident until you complete and file an MP336b form with them via your local bankers.   This form is called an “Emigration Form” and includes a declaration of your local assets and liabilities at the time of your intended departure from the country. As mentioned in the first article in this series most folk who leave South Africa do so without completing this “Emigration Form” under the mistaken belief that it will somehow impact on their Citizenship rights.

This fear may arise because the signature portion of the form includes a declaration that one is “permanently relinquishing my/our South African residence to take up permanent residence in the country specified”.  The fear is unfounded because the right to reside in South Africa stems from one’s Citizenship and the form does not include a renunciation of one’s Citizenship or a renunciation of the right to reside in South Africa at any time in the future.

The form also includes an undertaking to repatriate any funds exported from South Africa if the person returns to live permanently in South Africa within five years from the date of their emigration.  This is designed to thwart anyone who thinks they can just quickly emigrate to get their money out the country without any real intention of moving permanently abroad.  SARB will be on the lookout for folk who try and get around exchange controls in this way.

Why emigrate for exchange control?  Simply because by doing so you will be able to take all of your assets and investments out of South Africa without restriction [except for “Living Annuities” if already retired].  The levy payable to SARB on amounts in excess of R4 million in exported funds has been cancelled.  Inheritances will be free to flow abroad from local benefactors. Those who have retirement annuities “trapped” in South Africa will be able to terminate these products, pay income tax and export the full net proceeds without having to wait for income payments to trickle in over time.  If you return to South Africa after you have spent five or more years abroad, you will be able to retain your offshore assets.  Perhaps most important of all, the Revenue Authority [SARS] will have irrefutable proof that you are no longer a resident for Tax purposes and so you will have broken the link to World Wide taxation in South Africa on all your income and capital gains.

The unintended consequence?  Of course, as with the previous topics I have covered, there can be some curved balls to a formal emigration.  There are restrictions on local credit cards [you have to relinquish them] and on your local bank account [they will monitor that carefully to ensure you do not become a “courier” for exporting other peoples funds for them via your own account].  The big one to be aware of however is that on emigration you are deemed for Capital Gains Tax purposes to have disposed of all your local assets at market value – so will have to account for CGT even on assets you leave behind and don’t sell up.

Take professional advice to get it right for your particular circumstances – whether you are planning to emigrate or if you left RSA ages ago without emigrating.

John Wallace

Quick Links:

  • Alternative Investments
  • Estate Duty
  • Exchange Control
  • Offshore Mutual Funds
  • Risk Profiling
  • SA Citizenship – Issues for Emigrants / Expats
  • SA Exchange Control Residency – Issues for Emigrants / Expats
  • SA Tax Residency – Issues for Emigrants / Expats
  • Trusts - A Basic Overview
  • Glossary of Investment Terms

Our company

Finlaw Consulting SA (Pty) Ltd Reg. number 1998/015129/07

Our license

Licensed for financial services under Reg. number FSCA 7259

Our directors

John M Wallace Simon J Francis Nolan Wallace Stacey D Barron

Search our site


Powered by WordPress
© Finlaw Consulting SA (Pty) Ltd
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT