You’ve done it – you’re finally making the move abroad. Between visa applications, relocation plans, and farewell dinners, it’s easy to overlook one small detail with big consequences: your money back home.

Your South African investments don’t automatically follow you across borders. Until you’ve officially ceased tax residency, SARS still has a claim on your worldwide income. Understanding South African expat tax, your tax resident status and tax emigration is the first step to taking full control of your finances from abroad.

3 Key takeaways for South African expats and those looking to emigrate from South Africa:

1. Your investments don’t automatically become offshore. When you emigrate, your South African assets remain governed by local tax and exchange control laws until you’ve formally ceased tax residency with SARS.
2. Ceasing tax residency unlocks financial flexibility. Once you’ve permanently left South Africa and no longer meet the residency tests, you can update your status with SARS – paving the way to access certain retirement funds and manage your wealth more efficiently across borders.
3. Strategic planning protects your returns. From exit tax and capital gains to offshore transfers, getting expert guidance ensures your investments stay compliant and tax-efficient, no matter where in the world you live.

Understanding South African tax residency rules

When you move abroad, your first financial priority should be clarifying your South African tax residency status. Why? That’s because whether you’re considered a resident or non-resident directly affects how your income and investments are taxed by the South African Revenue Service (SARS).

Read more: South African tax residency rules – expats, are you still tax residents of South Africa?

Important things to understand about South African tax residency and expat tax:

1. Your residency status is not linked to your physical location, which means you can live overseas and still be taxed by SARS.
2. You are a South African tax resident by default, and it is your obligation to inform SARS if you no longer meet the requirements for tax residency. Until you notify SARS, they are entitled to continue to treat you as a tax resident, and expect you to pay tax on your worldwide income and your South African assets and investments. This is known as expat tax.
3. The only way to avoid paying tax in South Africa is to cut tax ties, by ceasing your South African tax residency.

Read more: Why South African expats must stay sharp on SARS tax residency rules.

How to cease tax residency in South Africa

The old concept of “financial emigration” through the Reserve Bank has been replaced by a SARS-driven process known as tax emigration from South Africa. When it comes to your tax residency status, SARS uses SARS uses two key tests to determine whether you remain tax resident:

1. The ordinarily resident test— This looks at where your true home is: the place you naturally return to, even if you’re living abroad.
2. The physical presence test — This counts how many days you spend in South Africa over a rolling period. Exceeding these limits could keep you classified as a resident for tax purposes.

Read more: Breaking tax residency with SA: when to apply the physical presence or ordinary residence test.

If SARS decides that you have not broken your tax residency, you will remain a tax resident and you’ll continue to pay tax on your foreign income in South Africa, even while living overseas. You will be treated as a tax resident temporarily abroad, and will have a number of tax relief measures available to you to reduce your double tax burden. However, if SARS confirms your non-resident status, you’ll only be taxed on South African-sourced income such as rental income or dividends.

Ceasing your South African tax residency is a major step toward financial freedom — and FinGlobal’s specialists make it smooth, compliant, and stress-free.

Moving money offshore from South Africa

You’ll need to comply with exchange control rules when moving money offshore from South Africa. There are limits on outbound transactions, and these are managed by the South African Reserve Bank (SARB) and determine how much you can transfer abroad each year.

South African tax residents can use two main offshore allowances:

• Single Discretionary Allowance: Up to R1 million per adult, per year, with no tax clearance required.
• Foreign Investment Allowance: Up to R10 million per adult, per year, with a SARS Tax Compliance Status (TCS) PIN for “Approval for International Transfer.”

So, how much money can you send overseas from South Africa? Technically, up to R11 million per year if you’re a tax resident and compliant with SARS and SARB. But jumping through the tax and exchange control administrative hoops can be daunting – which is why many expats rely on FinGlobal to manage the tax clearance and foreign exchange process from start to finish.

Understanding retirement annuity and preservation fund rules

When it comes to retirement savings, expats often ask: can I access my retirement funds once I’ve emigrated? The answer depends on your fund type and your tax status.

Accessing retirement savings after tax emigration

After emigrating from South Africa, you can access your retirement funds – but only once certain tax and residency requirements are met. The three-year rule, introduced in March 2021, applies to retirement annuities, preservation funds, pension funds, and provident funds.

Here’s how withdrawing your retirement savings works post-emigration

1. Cease tax residency: You must complete the tax emigration process through SARS to become a non tax resident.
2. Wait three years: You must maintain non-resident status for an uninterrupted period of three full years.
3. Apply for a tax directive: SARS issues this to confirm how much tax will be deducted from your lump sum.
4. Receive your payout: After tax, funds are transferred to a non-resident account, ready for international transfer.

Fund Type Pre-Retirement Lump Sum Withdrawal Access

How property and unit trusts are taxed when you emigrate

Your South African property and investments don’t disappear once you leave the country. You can keep them, sell them, or transfer the proceeds — but each choice has tax consequences.

• Property and capital gains:
  If you keep a property, your rental income remains taxable in South Africa. You’ll still need to submit annual returns and declare that income, even as a non-resident. When you decide to sell, capital gains tax on property in South Africa applies. SARS treats the sale as a taxable event, and buyers are usually required to withhold part of the proceeds under the Non-Resident Withholding Tax rules.
• Unit trusts and managed funds:
  Unit trusts are considered South African assets, and profits from them may attract capital gains tax on unit trusts in South Africa. As a non-resident, you’re still liable for tax on South African-sourced income, although double taxation agreements may reduce your overall burden.

Read more: What to do with investments if you plan to emigrate from South Africa.

What to know about exit tax and deemed disposal

One of the most misunderstood parts of emigration is the exit tax from South Africa. When you cease South African tax residency, SARS treats it as though you’ve sold all your worldwide assets the day before you left. This “deemed disposal” essentially triggers a capital gains tax liability on your emigration from South Africa.

It’s a paper transaction, which means you don’t actually have to sell anything – but it can still create a South African exit tax liability. Your South African property and certain retirement funds are excluded, but the growth in your other assets (like shares or unit trusts) is taxable.

FinGlobal: staying compliant with expert support

Emigration doesn’t cut your ties to South Africa’s tax system overnight. If you hold local investments – such as property, shares, or pension funds – you’ll still need to manage your SARS reporting obligations until your status is formally updated to non-resident for tax purposes.

FinGlobal provides expert guidance every step of the way, assisting with exit strategies, including retirement annuity withdrawal, SARS clearances, and cross-border money transfers to help you access, move, and manage your South African wealth efficiently and compliantly from abroad.

Ready to put FinGlobal’s trusted services to the test? Leave your contact details below and we’ll be in touch to discuss what happens to your South African investments and assets when you emigrate.