How to disclose a taxpayer’s emigration on a tax return?
03 February 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: My client has been working abroad for several
years and has had no South African income.
Nil returns have been submitted and assessed up to 2014. He has just inherited a substantial sum in
assets and cash from his late mother’s estate.
He is also a beneficiary of a family trust which the trustees have
decided to wind up, distributing all the assets to the two main beneficiaries,
my client and his sister. Half the share
portfolio of the trust was sold and the proceeds distributed to my client who
becomes liable for the capital gains tax on that gain. He has reinvested some of that cash in shares
and has acquired other shares as a distribution from his late mother’s
portfolio. As he has now decided to
relocate permanently to Australia he should revalue his portfolio and accept
liability for CGT on any gains from the base value, after which, as a
non-resident, and further realised gains will be exempt.
My query is how exactly do I go about declaring this change to non-resident
status and recording the CGT event?
A: As noted section 9H of the Income Tax Act will
deem the disposal to be the day before ceasing to be a resident and ends the
year of assessment on that day.
On SARS’ Efiling you can request a 2015 tax return and you will receive a
pop up as to whether the reason for the return is emigration as shown below.
You can then proceed to disclose the emigration and CGT event once the relevant
return has been created in the wizard.
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 decision.