Ep. 16 – South African Expat Tax Changes and What Expats Must Do Before 1 March 2020 with Hugo van Zyl

Hugo van Zyl CA(SA) TEP MTP(SA) is well-known for his expertise in cross-border tax and financial planning.  It is no surprise that his colleagues refer to him as “ask Hue’Gle” when all other resources fail.  His track record speaks for itself.

In this episode, we get into the nitty-gritty of the changes to the so-called “expat tax” in South Africa.  With the new changes already enacted into law, the implementation of the new changes has been deferred until 1 March 2020.  Many expats have not considered the impact this will have on them.  Financial Advisors are just as confused in many cases and are at a loss when having to point their clients in the right direction.

Some of the aspects we discuss include:

• Does cross-border tax and exchange control only apply to certain groups or individuals;
• Is it a requirement to give up your South African citizenship or to give up your South African passport when you immigrate;
• Section 10(1)(o)(ii) of the Income Tax Act change – the new R1m exemption on foreign employment income cap explained and who it applies to;
• How much of the foreign tax paid can be used as a credit against tax payable in South Africa;
• Financial Emigration – myth or solution;
• Who can use the 330-day rule;
• Double Tax Treaties – the big solution;
• Exit Tax payable on immigration and how much it is for different entities;
• The UAE and its treaty in detail;
• We answer 7 questions from our listeners
  1. What should financial advisors consider and what questions should they ask clients living and working abroad;
  2. Trustees of a trust who emigrate – what are the considerations;
  3. What should young professionals consider when moving abroad;
  4. What happens to tax already paid in the foreign country;
  5. What are the options for a person currently working in Zambia who is planning to retire in the next 3 years;
  6. What should a person do who works in Saudi Arabia, but their spouse is still living in South Africa;
  7. Foreign Investment Allowances;

We also discuss Circular 4 of 2014 that caters for life and living annuities to be paid directly to a foreign bank account if the Annuitant has a foreign FICA address.  Such payments will not affect the person’s discretionary travel allowance nor their R10m annual allowance.

Minutes after the interview, SARS issued an FAQ document that confirms everything we discussed in the interview.  You can download it here.

Enjoy the episode!