At JHCO Financial Services, we understand that ceasing to be a South African tax resident involves navigating a detailed and often complex process. With our expertise, we ensure you’re guided every step of the way, making the journey as straightforward as possible while adhering to SARS guidelines.
What Does the Process Involve?
Ceasing to be a tax resident means demonstrating to SARS that you no longer meet their criteria for tax residency. Here’s an overview of the steps:
- Understanding Your Residency Status
SARS determines your tax residency based on two tests:- Ordinarily Resident Test: Assessing whether South Africa remains your primary home or base of operations.
- Physical Presence Test: Evaluating whether you’ve been physically present in South Africa for more than 91 days per year over the last five tax years.
- Declaring a Change in Status
To cease residency, you must formally inform SARS and provide evidence that you meet the criteria to no longer be considered a resident. This can include relocation abroad, permanent employment in another country, or other life changes. - Exit Tax Calculation
SARS requires taxpayers ceasing residency to pay “exit tax” on deemed disposals of certain assets. Proper calculation and documentation of this tax are critical to avoid penalties or audits. - Finalising Tax Compliance
You must update your tax profile with SARS, submit supporting documents, and ensure your affairs are fully compliant before finalising your change in status.
How JHCO Financial Services Assists You
- Initial Assessment: We begin with a thorough review of your circumstances to determine your eligibility for ceasing tax residency.
- Document Preparation: Our team advises and assists in compiling the necessary documentation, including proof of emigration, employment contracts, or foreign residency permits, and determines whether they are SARS standards to avoid delays.
- Tax Calculation and Compliance: We expertly handle the calculation of your exit tax, ensuring accuracy and efficiency.
- Engaging with SARS: From submitting your declaration to responding to queries from SARS, we act as your trusted representatives throughout the process.
- Tailored Advice: We’ll provide personalised guidance on potential impacts, such as double taxation agreements or implications for your South African investments
What You’ll Need to Get Started
To assist you effectively, we’ll need the following:
- Proof of Relocation or Residency Abroad:
Examples include foreign residency permits, employment contracts, or rental agreements. - Comprehensive Financial Records:
Details of your assets, liabilities, and tax filings to facilitate accurate exit tax calculations. - Travel Records:
A record of your physical presence in South Africa and abroad over the past five tax years. - Personal Information:
A copy of your ID/passport, SARS tax number, and any correspondence with SARS regarding prior tax matters. - Investment or Business Details:
If applicable, details of South African assets like property, shares, or businesses for the exit tax assessment.
Why JHCO Financial Services is the Right Partner for You
At JHCO, we prioritise transparency, efficiency, and personalised service. Our team of tax experts ensures you avoid common pitfalls and achieve compliance with minimal stress.
Don’t leave your financial future to chance. Together, we’ll navigate the process of ceasing tax residency with confidence and ease
