You have left South Africa for good, but your retirement savings are still here. So, what can you do about that?
Ceasing South African tax residency does not release your pension in South Africa
When you cease South African tax residency, SARS regards you as having sold certain assets the day before you left. That is the exit tax. Retirement fund interests are excluded from it, so there is no exit charge on your pension fund, provident fund or retirement annuity. SARS keeps the right to tax you later, when it is actually paid to you.
When you can access retirement funds in South Africa: the three-year rule
Access depends on what you hold, and the two-pot system changed the picture again on 1 September 2024.
South African retirement annuity and preservation funds
If you have been a tax non-resident for an uninterrupted period of three years or longer, on or after 1 March 2021, you can take the full value of the vested and retirement components before retirement. For preservation funds in South Africa, this applies even if you have already used your once-off pre-retirement withdrawal.
Employer pension and provident funds
From 1 September 2024, a member who has ceased to be a resident for an uninterrupted period of three years or longer may withdraw the full value in the retirement component before electing to retire. This is the practical value of the rule for people still in an occupational fund, because the retirement component cannot be taken in cash on resignation.
The savings component under the two-pot retirement system
The savings component sits outside the three-year rule. You can take one savings withdrawal per tax year whatever your residency, subject to your fund’s minimum. It is added to your taxable income and taxed at your marginal rate, so the retirement lump sum tables do not apply to it.
Living annuity South Africa
If you have already retired and bought a living annuity, ceasing South African tax residency does not unlock the capital. For 2026/27, ending the policy and taking the entire remaining capital as one lump sum is only permitted if the value falls below R150,000.
You must provide proof of when you ceased to be a resident. This can be backdated according to the proof you provide.
What your fund has to prove
SARS needs more than your non-resident confirmation letter. That letter on its own does not prove an uninterrupted period of three years or longer.
Your fund administrator submits the directive application together with:
a certificate of residence from the tax authority where you now live, no older than 12 months
proof of the cessation and the three uninterrupted years, such as passports showing entries and exits, or foreign tax assessments
SARS will reject the directive if your last ITR12 before departure was not submitted and assessed, or if you never told SARS about the cessation through the RAV01 form.
Tax on a retirement lump sum in South Africa
A pre-retirement withdrawal is taxed on the withdrawal benefit table. For 2026/27, this is the applicable table:
| Lump sum | Tax |
| Up to R27,500Â | 0%Â |
| R27,501 to R726,000Â
 |
18% of the amount above R27,500Â |
| R726,001 to R1,089,000Â | R125,730 plus 27% of the amount above R726,000Â |
| Above R1,089,000Â | R223,740 plus 36% of the amount above R1,089,000Â |
Every lump sum you have taken since 1 October 2007 counts cumulatively when the rate is worked out. The R27,500 is a lifetime figure, so any earlier withdrawal has already used part or all of it.
The retirement table is far more generous, with the first R550,000 free of tax. Cashing out at 45 costs you considerably more than waiting until you retire at 65.
Where a double tax agreement (DTA) fits
A South African retirement fund is a South African source of income, so it stays taxable here whether or not you are a tax resident. A DTA can reassign that taxing right to your country of residence.
The RST01, the application for relief from South African tax, applies to pensions and annuities payable periodically. It cannot be accepted as a tax directive for lump sum payments.
For a lump sum, the fund submits a directive application asking SARS to take the DTA into account. SARS expects the fund to confirm that you have taken advice on your DTA position before it applies for the directive.
Settle this before the directive goes in. Correcting it afterwards runs through an objection rather than a refund request.
Moving the money offshore
The payment lands in a South African bank account first. The single discretionary allowance is available to residents only.
Once a person has ceased tax residency, an authorised dealer may transfer up to R10 million per calendar year on their behalf, provided they are 18 or older, tax compliant, and have obtained a TCS PIN through the SARS approval of international transfer (AIT) process. Amounts above R10 million require a SARB Financial Surveillance Department approval in addition to the SARS verification
In short
Ceasing South African tax residency starts a three-year clock. The realistic sequence is:
- Cease residency correctly and get the date right
- Stay compliant for three uninterrupted years
- Gather your residence and travel evidence for the fun
- Settle the DTA question before the directive is submitted
- Arrange the transfer
If you are retiring offshore, plan this sequence well before you need the money.
FAQ
- Can I withdraw my South African retirement annuity if I live abroad?
Yes, once you have been a non-resident for an uninterrupted period of three years or longer, on or after 1 March 2021. You can then take the full value of the vested and retirement components before retirement. - What are the retirement annuity rules in South Africa for non-residents?
The same fund rules apply, with one addition. Three uninterrupted years of non-residency gives you a pre-retirement withdrawal route that residents do not have. - How does the two pot system affect my withdrawal?
The savings component is available once per tax year regardless of where you live. The retirement component follows the three-year rule. - Is there tax on a pension lump sum in South Africa if I have emigrated?
Yes. A South African retirement fund is South African sourced income and stays taxable here. A DTA may shift that right, but it has to be raised before the directive is submitted.
FinGlobal: helping you navigate your South African pension when you emigrate
Leaving South Africa permanently can affect what you can do with your pension fund and when you can access it. If you need help with ceasing your tax residency, understanding the rules around your retirement fund, or transferring funds abroad, FinGlobal can guide you through the process and help you understand your options. Leave your details here and one of our consultants will be in touch.