Should I stay, or should I go? It’s a great song from The Clash, and it’s also a phrase that so many of us in South Africa grapple with at least every few years.
When it comes to our money, it’s less about if we’re going or not and more about if we’re planning to return. For some people, the trip overseas is only for a season, as they want to cash in on a great opportunity but don’t want to cut their ties to their homeland. While this doesn’t fit with the formal understanding of emigration, it’s become a popular choice and fits the same conversation.
For others, it’s a permanent move that they’re determined to make work. It is critical to understand your objective to understand the financial impact and make informed decisions.
There are different considerations around working with your finances in both situations. There are so many things to think about when planning to emigrate, and it helps to have good, solid advice from people who understand the different areas at play. It’s not just about job satisfaction or living standards; it’s about shifting your entire life into a culture and lifestyle that is quite different.
The ideal outcome will depend on your unique circumstances, which is why professional advice is essential.
Here are a few questions to get the ball rolling:
- What will the financial gain be if you were to emigrate?
- Are you willing to give up the South African lifestyle?
- Where are your family and loved ones located?
- Is alternative citizenship or residency easily and affordably available to you?
According to Nedbank’s website: Emigration has tax and exchange control implications. If you are considering emigrating, it is important to have a holistic picture of all the South African tax (SARS) and South African exchange control (SARB) implications during your lifetime.
If you have South African resident children or grandchildren residing abroad but have not formalised their emigration, it is equally important to understand the impact your death may have on their ability to receive an inheritance from your South African estate.
At SFP, we also assist our clients who wish to end their residency status for South African tax purposes to obtain a formal tax opinion.
Sometimes investigating the pros and cons of emigrating is simply about securing a ‘Plan B’. When there are times of political or market uncertainty, it’s comforting to know that at any moment, you can hop on a plane and go live in another country, where you have assets and some financial structures already in place.
This means that you could start moving money abroad before you decide to move, and you can also keep money here after you move. Each case is unique.
As of writing this, South African residents can externalise a significant part of their South African assets without emigrating financially. In terms of the current excon limits, individuals can externalise R1 million per calendar year (through the SDA) without needing to obtain a tax clearance, and R10 million per calendar year (through the FIA) after having obtained a tax clearance certificate. In addition, SARB is considering special applications for externalising amounts well over these limits.
If you’re considering emigrating your family, or just your money, let’s have a chat.