Ricochet News

Have you left South Africa and need to access your retirement annuity?

By Daniel Baines – Tax Consultant at Mazars and author of ‘How to Get a SARS Refund' - Oct 8, 2018
Have you left South Africa and need to access your retirement annuity?

If you are a South African citizen, but have already left the country permanently, you may have the problem of not being able to access your South African retirement annuity (RA).

In terms of South African tax law, an individual may only withdraw funds from their RA if they formally emigrate, they reach the age of 55 or if the value of the RA is under R7 000.

You will not, therefore, be able to withdraw funds from your RA unless you formally emigrate (presuming that you are yet to reach 55 years of age).

There are many reasons why it may be a wise choice to liquidate your RA in South Africa sooner rather than later; the primary one being that if you leave your RA in South Africa and only bring it to your new country when you retire (i.e. you reach the age of 55 and are able to access your RA funds), there is a very good chance that this asset would have devalued significantly due to the weakening rand.

Have your South African tax affairs in order

In addition, you are going to have to have your South African tax affairs in order to be able to withdraw a significant amount of money from the country (currently more than R1 million).

If you have not filled South African tax returns since you have left and are not planning on doing so (the circumstances under which you are required to file tax returns in SA will be dealt with in a separate article), then having to get your SA tax affairs in order in twenty years’ time may prove a bit difficult.

Formally emigrating is a process that is handled by the South African Reserve Bank; it results in you no longer being considered South African resident for exchange control purposes.

Please note that breaking tax residency and exchange control residency are two separate matters. The following steps need to be taken in order to formally emigrate:

  1. Ensure that your South African tax returns are up to date;
  2. Apply to SARS for an emigration tax clearance certificate; and
  3. Apply to the South African Reserve Bank to formally emigrate.

The first two steps are generally done by your tax advisors, but the third step must be handled by a South African bank.

The other reason for formally emigrating is if you have received a large inheritance in South Africa; you may have issues getting the inheritance out the country until such time as you have formally emigrated.

For more information, visit Mazars Port Elizabeth at 30 Bird Street, Central, Port Elizabeth, or call 041 501 9700. Also visit them at www.mazars.co.za

Follow more RNEWS articles, subscribe to our YouTube channel and for breaking news LIKE us on Facebook.