Author: Claudia Aires, Head of Financial Emigration at Financial Emigration
The death of a family member is never a topic that we like to discuss, however it remains a reality that one needs to prepare for in future, which is key for a smooth transition in the closure and pay-out of deceased estates and inheritances.
Thousands of South African expatriates are beneficiaries of inheritances from deceased estates in South Africa. This can become an administrative nightmare for the beneficiary when the time comes for the South African estate to distribute to its beneficiaries and the subsequent transfer of funds from South Africa to a beneficiary abroad.
Most South African’s abroad have not prepared for such inevitable scenario and will find it difficult to close off the affairs if they have not complied with the formalities of receiving inheritance abroad.
How does a South African abroad receive inheritance from a South African source? According to South African law and the Currency and Exchanges Manual for Authorised Dealers, a South African abroad will need to formalise their emigration before they will be able to receive inheritance abroad.
The formalisation of emigration is commonly known as Financial Emigration and the main requirement to be able to undergo this process is to have a permanent intention that you will not be returning to South Africa on a permanent basis. Intentions change all the time, so the intention must merely be this when deciding to proceed with the process.
Undergoing this process is arguably the simplest, cleanest and most compliant way of ceasing tax residency in South Africa. It is a formal process through the South African Revenue Service and the South African Reserve Bank, which has been endorsed as the “right” way to go about it by South African parliament.
Another very important point to note is that you can backdate your financial emigration, under certain circumstances, to the date you left South Africa. Often South Africans have been abroad for many years without formalising their emigration and being able to backdate FE can be extremely useful in lowering any capital gains tax liability that could arise.
Complying with the Law
South African’s abroad, there is a solution available to you to ensure you are legally compliant so that you may exercise your right to receive the benefit of an inheritance. Financial Emigration is currently the only formal process available in confirming your non-tax resident status of South Africa, and thus the only solution in this scenario.
MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, firstname.lastname@example.org, www.atthatpoint.co.za
For more information on Financial Emigration please visit: http://www.financialemigration.co.za
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