When a taxpayer relocates abroad or emigrates, then from a tax perspective, it is referred to as ceasing to be a South African tax resident (not to be confused with citizenship). Ceasing to be a South African tax resident may, however, come with a tax cost. One of the most consequential and frequently misunderstood provisions facing South Africans who relocate abroad is the deemed disposal triggered by section 9H of the Income Tax Act. When you cease your South African tax residency, section 9H applies, and the tax consequences can be significant if you are not properly prepared.
In a recent judgment in the matter Lombard Insurance Company Limited v The Commissioner for the South African Revenue Service (Case No. 7177/2022, Gauteng Division, Pretoria), the importance of the wording of a guarantee issued to the South African Revenue Service (“SARS”) came to the fore.
South Africa is proud of its Constitution, which protects people’s rights and limits what the government can do. There are legal rules meant to support fairness, such as estoppel and legitimate expectation. However, these rules can sometimes put ordinary people at risk without them realising it. Because of this, people should be careful about trusting what government officials say unless they first get legal advice.
BEWARE OF CYBERCRIME.WE ARE NOT RESPONSIBLE IF YOU PAY INTO THE WRONG ACCOUNT
Shepstone & Wylie (S&W) will not change its banking details.
Any communication you receive stating we have done so will be false - please contact us immediately.
If you bank with Standard Bank, Nedbank, Investec, FNB or Absa Bank you are encouraged to pay us using the bank approved beneficiary: Shepstone and Wylie Attorneys.
If you don’t use the bank approved beneficiary option, you must always call us to verify our banking details before making any payment.
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