The one key concern has however remained; as a South African tax resident, you are subject to tax on your worldwide income; enter Henley & Partners, the global leader in residence and citizenship by investment. Now whilst your residency needs are taken care of in the best conceivable way with Henley’s Plan B options, what was made evident in Henley’s annual roadshow last week, is that it all starts with the correct tax and legal planning around getting your money out of South Africa!
5 Cities in 5 Days
We were once more, as a Trusted Partner to Henley, afforded the opportunity to be a part of their annual roadshow across South Africa, more specifically, the Wealth Preservation Panel. Travelling across 5 cities in 5 days may be exhausting, but without a doubt worth it for the amount of knowledge amassed in a single week. The roadshow covered everything from how to best plan your departure, to the most prudent principles of currency exchange and even specific offshore products to protect your wealth.
All of this considered, the starting point, and key concern that became evident in all cities, and from questions raised by all attendees, was “how do we get our money out of South Africa?”. This trend varied significantly from prior years, as the South African Revenue Service introduced a new channel for individuals looking to take money offshore, called the Approval for International Transfer.
Whilst this new enhanced and streamlined process was introduced only on 24 April 2023, we have seen a number of advisors and clients alike, struggling to comply with SARS’ new strengthened tax treatment of international transfers.
AIT Process Compliance Challenges
With so many beautiful destinations being available under Henley’s residency or citizenship by investment, including the Caribbean, Greece, Switzerland and various others, the movement of that capital investment is an imperative consideration when starting your journey with the firm of Global Citizens.
From a perspective of SARS’ compliance trends, starting with their strategic objectives, this “upgrade” to its money movement approval process, especially in disclosing of foreign assets, was only the logical next step. The AIT Pin is now required not only for taxpayers who are non-resident in South Africa, but also for residents wishing to approve fund movement outside of South Africa, in excess of the R1 million Single Discretionary Allowance.
When considered practically, this would translate to every programme on offer for residency or citizenship, requiring the applicants to secure an AIT for success. Where SARS are approached from the correct position of having completed a reasonability analysis on the funds to be transferred, and all required supporting documentation are submitted, we have found them to be quite quick in issuing the sought after AIT Pin.
It must however be noted that where the AIT needed exceeds R10 million (after the R1 million SDA is used for South African residents), the further requirement of approval from the South African Reserve Bank does kick in. It is this tier of compliance, which, without the correct channels, becomes the stumbling block for many High-Net-Worth Individuals.
Making Money Movement Easy
When it comes to safeguarding your wealth, or ensuring your family are well taken care of after your passing, having the correct tax and legal planning is the essential starting point. To ensure success in moving your money offshore, with the least possible hassle, a bespoke and 360-degree solution is always the best market practice.
As a Trusted Partner to Henley, as well as a multitude of tax and legal advisors, here at Tax Consulting we believe in creating the best customized solution for each and every client. This encompasses your initial tax planning, setting up your foreign exchange bank account and physically moving your money for you. As the largest independent tax practice in South Africa, our multi-faceted team of experts includes astute tax attorneys, seasoned accountants, and international banking experts.
Ensuring you receive optimal service is our priority, including ensuring your compliance with both SARS and SARB when securing your AIT pin; securing you the best possible exchange rate through our banking partnerships, and making this journey as easy for you as possible – “we take care of it, all of it”!
