5 Benefits Of Tax Emigration From South Africa

By Paul de Klerk
Investment Specialist
(FSP110367)

Tax emigration from South Africa can be overwhelming. With so much conflicting information out there, it’s easy to get confused. That’s why we’re here to clarify the process and highlight the key advantages of tax emigration, helping you make informed decisions.

Let’s explore some of the significant benefits of completing tax emigration.

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1. Unlock Early Access to Your Retirement Savings

One of the biggest advantages of tax emigration is the ability to cash out your retirement annuities and transfer the funds to your new country.

Even if you’re under 55, you can surrender your annuities and receive the money in cash, giving you flexibility in how you use it. Whether it’s for settling into life in your new home country, putting down a deposit on a home, or other personal plans, the choice is yours.

However, current regulations require you to have been a tax resident in another country for three years before you can access these funds, so timing is essential.


2. Easily Access Inheritance Funds in South Africa

Another compelling reason to consider tax emigration is to streamline access to inheritance funds. If you don’t have a South African green ID book, opening a local bank account from overseas becomes nearly impossible.

By completing tax emigration, you can set up a non-resident account to receive inheritance payouts. Executors or banks often demand proof of tax emigration before releasing funds.


3. Say Goodbye to SARS for Good

Filing South African tax returns from abroad can be tedious. With tax emigration, you sever all ties with SARS, making your financial obligations in South Africa a thing of the past. Once the process is finalized, you’ll only need to file one last tax return, and then you’re free.


4. Protect Your Retirement Savings From Devaluation

The rand’s value against major currencies, such as the Australian dollar, has declined significantly over the years. A decade ago, the rand was much stronger; today, it’s a shadow of its former value.

By cashing in your assets now, you can safeguard their value and make the most of favorable exchange rates instead of waiting and risking further devaluation.


5. Shield Yourself From Future South African Tax on Foreign Income

South Africa’s expat tax rules mean that if your annual earnings exceed R1.25 million, SARS might come after you for additional tax—especially if your foreign tax rate is lower than South Africa’s.

This includes more than just your salary. Allowances like housing, travel, and other perks could push you over the exemption threshold. Tax emigration ensures that SARS cannot tax your foreign income, giving you peace of mind about your finances.


Need to speak to someone about your own situation?

If tax emigration is the solution you’re looking for, reach out to me for a free call.

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​NOTE:
Nothing in this article is to be considered personal financial advice. For personal guidance, please reach out to me any time for a one-on-one consultation.

PAUL DE KLERK
Investment Specialist
(FSP110367)