LEAVING ON A JET PLANE Emigrating from SA 26 October 2017

The process Collection of documentation MP336(b) Emigration tax clearance Section 9H? Application and approval Emigrant banking accounts Emigrating from SA

Definition “Emigrant means a South African resident who is leaving or has left South Africa to take up permanent residence or has been granted permanent residence in any country outside of the Common Monetary Area.” Emigrating from SA

Definition “Resident temporarily abroad means any resident who has departed from South Africa to any country outside the Common Monetary Area with no intention of taking up permanent residence or who has not been granted permanent residence in another country, excluding those residents who are abroad on holiday or business travel.” Emigrating from SA

Supporting documents – MP336(b) Proof that may reside elsewhere SA assets only Prior special applications Market values Original documents to be lodged with the Authorised Dealer Title deeds Share certificates Interest in Trust Emigrating from SA

Purpose: All about the export of capital Own Asset Trust Interest in Trusts Classification Purpose: All about the export of capital Own Asset Trust Created prior to emigration Created after emigration Third Party Funded Trust Created three years prior to emigration Funding analysis Emigrating from SA

Emigration tax clearance E-filing process Assets and liabilities for past 3 years 9H calculation Beware of linked entities Emigrating from SA

Section 9H exit charge Section 9H (2) provides: “Where a person (other than a company) that is a resident ceases during any year of assessment of that person to be a resident, …(b) that year of assessment must be deemed to have ended on the date immediately before the day on which that person so ceases to be a resident, and (c) the next succeeding year of assessment of that person must be deemed to have commenced on the day on which that person so ceases to be a resident” So two things happen Year of assessment comes to an end Deemed disposal Exemptions Immovable property in SA Assets with PE in SA Equity instruments – employment (section 8C) Emigrating from SA

Change in tax residence Ideal to plan that emigration date links up with date that cease tax residency Resident in SA defined: Ordinarily resident Physical presence test Present more than 91 days AND Present more than 91 days in previous 5 years AND 915 days in aggregate during previous 5 years. Split tax year created by 9H: Year 1: 1 March 2017 – Day before date of departure Year 2: Date of departure – 28 February 2018 End of November planning Emigrating from SA

The waiting game Application and approval from FinSurv Beware the limbo phase R10m FIA before starting with the process Emigrating from SA

Emigrant banking Blocked account Pre-emigration income Proceeds from blocked assets Not transactional account Private bank account Also blocked account / can be the same Card payments EFT payments Non-resident transferable account Funds from abroad Freely use Emigrating from SA

Foreign National vs Immigrant Returning Emigrants Foreign National vs Immigrant Valuation of assets when becoming resident again Planning opportunity: resettle on offshore structure prior to becoming SA resident Emigrating from SA

Michél Ungerer E: michel.ungerer@maitlandgroup.com T: +27 21 681 8611 Emigrating from SA

www.maitlandgroup.com www.linkedin.com/company/maitland www.twitter.com/MaitlandGroup www.youtube.com/MaitlandGroup www.maitlandgroup.com Emigrating from SA