Q: A client of mine
that’s a resident in South Africa receives a monthly state pension from the UK
of +/- R 10,000 (R 100,000 p.a.). Am I correct in thinking that it is only taxable
in the UK?
A: With regards to
the query tax residents of SA are taxable in general on their worldwide income.
Therefore the UK pension received by an SA tax resident would constitute gross
income as defined in section 1 of the Income Tax Act (ITA). However, in our
view if the whole pension relates to the services rendered in the UK, then the
exemption in section 10(1)(gC) ITA will apply.
In that instance it
would not be necessary to revert to the provisions of a double tax agreement to
determine taxing rights as SA would due to the exemption not tax the amount.
Disclaimer: Nothing in this
query and answer should be construed as constituting tax advice or a tax
opinion. An expert should be consulted for advice based on the facts and
circumstances of each transaction/case. Even though great care has been taken
to ensure the accuracy of the answer, SAIT do not accept any responsibility for
consequences of decisions taken based on this query and answer. It remains your
own responsibility to consult the relevant primary resources when taking a
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