Considering whether or not to emigrate financially is a rather big move for South Africans who have relocated abroad. However daunting it may seem, though, it’s important to consider this step if you’ve been living overseas for a while and have financial assets left in South Africa. And although the thought of a blocked bank account may fill you with dread, it really isn’t that complicated nor does it make your money inaccessible to you.
Why do people emigrate financially?
Financial emigration is a regulation set up by tax authorities for exchange control purposes. It is a way for SARS to monitor the money flowing across South African borders. Not all people need to emigrate financially, as you are allowed to transfer funds out of the country using your annual transfer allowances.
Financial emigration, however, changes your financial status to non-resident. It is the required route for those who wish to transfer the proceeds of their retirement annuities
, trusts or South African inheritance offshore, and the preferred route for those who plan to stay overseas indefinitely or for a prolonged period. Once you take this route, all funds you transfer offshore will flow through a central account called a blocked bank or blocked rand account
, which is monitored by a specialist banker at any of the flagship banks in South Africa.
How do I know if I should emigrate financially?
We’ve put together a handy checklist to help you determine for yourself where you stand legally and financially with respect to your assets in South Africa.
The South African expat checklist:
- Do you still have financial assets in SA?
- Do you still have an interest in a trust, partnership or company in SA?
- Do you still have retirement annuities in SA?
- Are you using SA credit cards?
- Do you still have property in SA and are you unsure whether to sell?
- Are you still registered for SA tax and obligated to submit returns?
- Do you have SA funds or investments you wish to transfer abroad?
- Are you expecting to be the recipient of an inheritance from SA in the future?
If you answered ‘no’ to all of these questions you have all your ducks in a row, well, done! If you’ve answered ‘yes’ to any of the questions above, you may still have financial responsibilities back in SA, and we are more than happy to help you finalise them and move your funds offshore.