If you left South Africa before 1 March 2021 and still have money in a South African retirement annuity or preservation fund, you can withdraw it once you have been a non-resident for tax purposes for at least three years in a row. Your years abroad before 2021 count, so if you left long ago, you may already qualify.
To get paid, you need to prove to your fund, and through your fund to the South African Revenue Service (SARS), the date you ceased to be a South African tax resident.
Changes in South African pension fund withdrawals
Before 1 March 2021, you could cash out your retirement annuity or preservation fund early by completing financial emigration with the South African Reserve Bank (SARB). Three dates changed that.
|
Date |
What changed |
|
1 March 2021 |
SARB phased out financial emigration. Early withdrawal now requires you to have ceased to be a South African tax resident for at least three uninterrupted years. |
| 28 February 2022 | Final date by which SARB could accept an emigration application that was already under way before 1 March 2021. Those members could still withdraw under the old rules. |
| 1 September 2024 |
The two-pot retirement system started, and the “emigration withdrawal” provision was removed from the Income Tax Act. SARS no longer accepts tax directive applications that use it. |
The three-year rule for South African retirement funds
If you left the country before 1 March 2021, you can withdraw from your South African retirement fund under the three-year rule. You will have to prove when you left the country.
Read more: Tax emigration: how to become a non-tax resident of South Africa
How do South African retirement annuities compare to provident funds?
The amount you can access depends on the fund type.
|
Fund type |
What you can withdraw under the three-year rule |
| Retirement annuity | The full vested and retirement components, once you have stopped contributing |
| Pension or provident preservation fund |
The full vested and retirement components, even if you have already used your once-off preservation withdrawal |
Your savings component works separately. On 1 September 2024, funds moved 10% of each member’s vested component, up to R30 000, into the new savings component. You can withdraw from it once per tax year, with a minimum withdrawal of R2 000.
Steps to access your funds
Your fund must get a tax directive from SARS before it can pay you. Only the fund can apply for this, so you have to provide everything it needs.
- Tell SARS you are a non-resident for tax purposes.
- Make sure your final tax return is assessed.
- Get a certificate of residence in your new country.
- Provide proof that you have been living abroad for an uninterrupted period of three years.
- Stop contributions to your retirement annuity and submit your claim.
How your South African pension fund withdrawal is taxed
SARS taxes your payout as a retirement fund lump sum withdrawal benefit. Previous withdrawals will influence how you are taxed. The first R27 500 is tax-free only once in your lifetime.
Read more: South African tax residency rules
FinGlobal helps South Africans abroad confirm their South African tax residency status with SARS, prepare the documents that the fund provider and SARS need, withdraw their retirement annuities and transfer the money to their offshore accounts. Contact us to find out whether you qualify and what your fund will need from you.
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