June 08

Expat South African Living in Australia? It is time to come clean and disclose your SA funds

 

Extract from the public statement made by  Malcolm Allen, Assistant Commissioner, Large Business and International (ATO Australia)
Take advantage now

 
Taxpayers who haven't declared all their income or profits from the sale of assets can take advantage of the Offshore Voluntary Disclosure Initiative, which closes 30 June 2010.  This initiative provides concessional penalty arrangements for taxpayers who take advantage and make a disclosure.
Taxpayers who self amended their returns to disclose offshore income will not be able to take advantage of the concessions offered by this initiative.

To qualify for the concession

To qualify for this congressional treatment, taxpayers need to submit a voluntary disclosure in writing on the Making an offshore voluntary disclosure statement, available on our website at www.ato.gov.au/offshorevoluntarydisclosure

Malcolm Allen
Source: ATO – International Taxation

 

Previous Blogs – by Hugo

• 2009 Tax law amendments

• Foreign Permissible Foreign Investment – Exchange Control Issue

• 2009 Tax Season Updates – April 2009

• Read more about the Smallwood appeal – see Press Release on the left!

• Facing the New UK NDR Rules? Then It Is Time to Formally Exit or Emigrate From South Africa

• Formal Emigration : The  Excon Exit Check-list

• Summary of all previous blogs

12:39 PM GMT  |  Read comments(0)

June 06

2009 Tax law Amendments – published for comment

Pravin Gordhan (the new Finance Minister) recently said parliament:

The SARS will intensify its efforts to detect and contest non-compliance. This is in accordance with international best practice – the IRS of the USA has been asked to hire 10 000 more auditors to raise more taxes and combat off-shore tax schemes.  Read more at http://www.treasury.gov.za/comm_media/speeches/2009/2009060501.pdf

1. Recent blogs – missed some of the previous comments – you will be able to find them here:

   1. Foreign Permissible Investments – As South African, what may or may I not own abroad? Guidance to expats, emigrants and IP owners
   2. Emigrating from South Africa? Or you left some time back – just page down
   3. 2009 Tax Season Updates – April 2009 – see also the June 2009 tax laws
   4. Read more about the Smallwood appeal – see Press Release on the left!
   5. Facing the New UK NDR Rules? Then It Is Time to Formally Exit or Emigrate From South Africa
   6. Formal Emigration : The  Excon Exit Check-list
   7. Summary of all previous blogs 

2. June 2009 tax laws  for comment – see the full lists of documents at http://www.treasury.gov.za/public%20comments/Draft%20taxation%20laws.aspx

   • Conversion of the Secondary Tax on Companies to the new Dividends Tax

   • Learnership tax allowance

   • Travel (car) allowances: Repeal of the deemed kilometre method:

   • Retirement withdrawals: The proposed legislation completes the reform process set in motion in 2008 regarding the taxation of retirement and pre-retirement withdrawal lump sums. Most of the proposed legislation dealing with lump sum tables and clarification of anomalies was published in the first batch of draft legislation in February 2009. The proposed legislation also seeks to simplify the taxation of minor beneficiary funds subject to regulation by the Financial Services Board, and to clarify the law when employers legitimately withdraw employer surpluses from retirement funds.

   • Estate Duty: surviving spouse can use a R7 million deduction amount on last death

   • One year wonder removed  1-year usufructory arrangement that artificially seeks to undermine the value of inherited property.

   • Provisional tax: In 2008, the provisional tax system was tightened to require 80 per cent accuracy in respect of the second provisional payment when compared to final assessed taxes due. Amid concerns that this requirement may not always be possible (especially for smaller businesses), the 20 per cent penalty will be waived in certain circumstances.

3. Emigrating from South Africa? Or you have already emigrated some time back

   Technorati Tags: Emigration

You may now resign from your local retirement funds and extract the entire after tax capital value from SA – i.e. gone is the one third limitations rules. The process involves:

• Apply for full Excon emigration - forms MP336 (b) and IT21 (a) to be completed, see my web page for guidance

NB: There is a tax issue to be considered as the monthly pension / annuities leaves free of SA taxes and levies yet the lump sum is normally   taxed in SA as income and the net cash value could be subject to the 10% Excon levy. In short, obtain tax advise before you proceed! That is local SA and new home country tax guidance! Then again, it may just be the best Rand to your currency you may see for long time, making the decision easy as the Dollar or Pound value banked is acceptable!

• Once the Excon approval was granted (Emigration Ref No and Blocked Account are the indicators) you can request a resignation as emigrant providing the information as listed in the attached document
• Please note that we have been given conflicting reply IRO +55year old emigrants. Old Mutual says no, you can not cash in and take 100% you have to retire and accept the normal 1/3 commutation where as Momentum suggested that "prior to retirement" refers to persons not yet withdrawing from the fund i.e. have not retired from the fund despite being 55+ years old.

I will update once we have final answers yet you are most welcome to pass onto expat South Africans  - send any requests for further information to Hugo van Zyl

Links

1.  http://www.sars.gov.za/LNB/MyLNB.asp – SARS tax laws

2. http://www.thesait.org.za/default.asp – SA Tax Institute

3. https://www.saica.co.za/Default.aspx – SAICA

4. http://www.mondaq.com/article.asp?articleid=79722 – IP deductions Ireland

5. https://www.saica.co.za/integritax/ - Integritax

6.  

7. http://www.treasury.gov.za/public%20comments/Draft%20taxation%20laws.aspx – June 2009 Batch

8. Also

• A new Canadian law amending the Canadian Citizenship Act came into effect on April 17, 2009. The new law gives Canadian citizenship to certain people who lost it and to others who are recognized as citizens for the first time. It also protects the value of citizenship by limiting citizenship by descent to one generation outside Canada. 

• The  Excon policy in respect of intellectual property being sold abroad 

• POEM / Smallwood Case overturned  Read more ... press release

•  

5:48 AM GMT  |  Read comments(1)

October 27

October 2009 – Excon relaxation announced

Minister Gordhan announced further Excon relation which was duly posted on the Reserve Bank webpage as Circular 13 of 2009.

The foreign capital allowance (FCA of FIA being Foreign Investment Allowance as referred to by SARS) allowing tax compliant SA resident individuals 18 years and older to transfer a once in a life time R2m (2006) into a foreign currency,  has been doubled to R4m (October 2009). The SARS policy document and the FIA001 or FIA 002 application forms to be used,  has not changed.

Residents (natural persons), who are over the age of 18 years may be permitted to avail of a single discretionary allowance within an overall limit of R750 000 (new limit 2009, was R500 000 since 2008) per individual per calendar year, without the requirement to obtain a Tax Clearance Certificate, which may be apportioned as either Donations to Missionaries, Maintenance Transfers,  Monetary Gifts and Loans to South Africans living abroad, Travel Allowance and or Study Allowance.

A further increase in the FDI outward investment limit from R50m to R500m has also been announced.  

Applications below the R500m  limit will be processed by authorised foreign exchange dealers (banks), subject to all existing criteria and reporting obligations.

Read more on Hugo’s webpage – Exit South Africa, which includes a link to circular 13 of 2009

Need more info on past Blogs and comments by Hugo

10:13 AM GMT  |  Read comments(20)

October 11

Another CGT Amnesty?: Important changes to tax laws and your primary or CC owned family home

Read previous blogs here Click here

 

During February 2009 the then Minister of Finance announced SARS wish to reduce the tax and compliance complexity associated primary residences and the Capital gains tax issues they face. 

 

A further "amnesty" became law on 30 September 2009.  

 

Your primary residence or family home is registered in a company, cc or trust and you or your spouse the shareholders or funders of the trust?  SARS has finally extended the CGT and transfer duty or than the tax-free transfer of a primary residence from a trust or company to the beneficiary or shareholder and/or his or her spouse.  

 

Certain very important and critical requirements must be fulfilled and then the primary residence may be transferred out of the "wrapper" without incurring transfer duty, secondary tax on companies and capital gains tax. This concession takes effect on 11 February 2009 (the date the property needs to be your primary home) and ends on 31 December 2010. The lawyers transfer fees and bond registration fees will have to be paid as per normal.

 

On 30 September another empowering law was promulgated and a full CGT exclusion will now apply to a primary residence up to a gross value of R2 million.

 

Neither tax residents nor tax non-residents previously residing in their primary residence need to worry about CGT or the CGT withholding taxes applicable to expats now living in say Australia.  

 

In short, should primary residence / home (as defined) but NOT your holiday home has a gross value of less than R2 million, you can sell it without worrying about CGT where as the homes sold for in excess of R2m will still qualify for the R1.5m primary residence CGT exclusion.  

 

Need more information? Make contact with Hugo

 

 

12:09 PM GMT  |  Read comments(0)

July 31

business profile: HUGO VAN ZYL

 

 

CA (SA), M.Com (Tax) business profile  International Tax Consultant 

Mobile: +27834078652 ● email: hugovzyl@iafrica.comXremoveX

Fax: +27 866 720 435 ● Skype: hugo.van.zyl AIM: hugovzyl

Previous Blogs on Exchange Control and Tax

 

 

Hugo van Zyl is a Chartered Accountant with a Master’s Degree in Taxation. With more than 20 years of experience in accounting and auditing, today Hugo has relinquished his private practice as a registered auditor and is a sought-after specialist in local and international tax. His main focus is on cross-border and emigration issues. He nonetheless retains his professional registrations with:

• The SA Institute of Chartered Accountants (SAICA) www.saica.co.za (member 00251094); and
• SARS as registered tax practitioner (PR-8C200C1).

Who are the clients?

Hugo assists individuals or companies, directly in association with several small and medium sized audit and law firms servicing their international client base. These services include

• cross-border Exchange Control applications for individuals emigrating as well as for small- and medium-sized businesses entering the international market;
• double tax treaty compliance
• advice on the legal and compliant use of South African and internationally owned intellectual property, such as trade marks, software licenses and franchise agreements
• assistance to small and medium sized audit firms with tax advice and to resolve tax disputes including VAT.

His client base includes many fellow South Africans dispersed around the world. Both those who left with nearly no cash as well as high net worth individuals leaving their home country or returning to their roots, or merely departing on secondment to fill appointments as business executives, academics or diplomats.

Using modern technology such as Skype, Box.net and Microsoft Office Live, MSN Chat, FON and other VOIP devices he is able to assist his clients around the world from his office in Brooklyn, Pretoria as though they were together in the same boardroom. From his office Hugo professionally attends to his international clients on a daily basis wherever they may reside or trade.

Lecture circuit

Hugo has travelled far and wide to lecture on Tax to South Africans dispersed all over the world, including Wembley, London where his lecture was presented in Afrikaans! Particularly since the well-publicized Tax and Exchange Control Amnesty of 2004, Hugo has been much in demand on the international lecture circuit for his presentations on offshore and the appropriate business structures necessary to be fully complaint with local tax and exchange control rules. In South Africa he has also trained SARS staff, lectured on Advanced Certificate in Trusts to students of various universities and also to SAICA members covering topics such as VAT, capital gains tax, emigrations, residence basis of taxation and much more.

Associate Business

Over the past few years, Hugo has either been employed or closely associated with several leading legal and advisory firms, some of them based outside of South Africa and others specialising in UK, EU and USA immigrations as well as residency permits resulting from property acquired in either Seychelles or Mauritius. As a result he is the Gauteng representative of Crusader Rock International, a global company that focuses on facilitating permanent EU residency permits in Malta and providing offshore properties and services, creating a Rand-hedge investment and lifestyle choice for South Africans. Any Malta enquires can be sent to hugo@crusaderrock.com

The man himself

Married, with no children Hugo enjoys travel, good food and wine. He is the national Argentier of the South African Bailliage, Chaine des Rotisseurs having previously served as the regional chair or Bailli de Pretoria. During 2007 he and the current National President or Bailli Délégué, travelled to Paris for their induction into this prestigious organisation which dates back to the 13^th Century. Fellow Chaine members visiting South Africa or other gastronomes interested in the Chaine and its wine and spirits club, OMGD, can contact Hugo on argentier@chaine.co.za

Hugo’s passion and commitment is to add value to his clients and particularly, to serve South Africans wherever they are working or living – be that in South Africa or around the world. For full information go to www.hugovanzyl.com

4:15 AM GMT  |  Read comments(0)