Countless South Africans today have families spread across continents or are themselves living abroad. Over the December festive season, many families united and shared time together. Watching these crowds descend in their droves on SA’s coastal towns made me wonder how many South Africans have just left and NOT formally emigrated. Often, these individuals departed as students or professionals, established lives overseas and never returned to live in SA. While this may be physically straightforward to do, technically it can carry material tax, exchange control and legal consequences if not properly managed!
In everyday parlance, emigration simply means leaving a country. In tax and legal contexts, however, emigration has specific implications — especially around residency, tax obligations, citizenship, and financial affairs. For many governments (including SA’s), emigration intersects with how a person is counted for taxation, social benefits (not too relevant in SA) and legal status. Importantly, an individual’s physical departure alone does not constitute emigration for South African tax purposes.
If you left SA without formally ceasing tax residency or if you did not use official channels to report your exit from SA and have not EMIGRATED, you are exposing yourself to all sorts of unexpected complications from a tax and exchange control perspective. We have covered this topic before and indicated what the pitfalls are and why the official emigration process is essential if you have left and do not plan to return to SA to live. It is not too late to emigrate if you left and did not formally emigrate, even if it was years ago. If this is the case, it is important to establish the exact circumstances involved before submitting documentation to the authorities in order to determine what the tax and exchange controls implications are going to be and whether penalties may apply.
What we thought would be beneficial is to provide you with a more structured overview of the process so that it is easier to understand what is involved. Emigrating is a life-changing decision that involves much more than booking a flight. It encompasses immigration paperwork, tax residency status, financial planning, and legal changes. While many choose to emigrate for safety, quality of life, economic opportunity, or for family reasons, the tax implications are significant — especially for South African tax residents.
Below, we provide a step-by-step guide to the emigration process and the considerations involved:
South African Emigration
1: Pre-decision and strategic planning (6–18 months before your departure)
Clarify your intention
- Confirm whether your move is temporary or permanent
- Decide whether you intend to cease your South African tax residency
- Identify your intended country of permanent residence
Intent is critical — the South African Revenue Service (SARS) assesses tax residency based on facts and circumstances, not solely on travel dates, although travel records and passport stamps are relevant.
Understand your tax residency status
- Are you ordinarily resident in SA?
- Do you qualify as a resident under the physical presence test?
- Depending on the jurisdiction you are moving to, it is important to review applicable Double Taxation Agreements (DTAs) with the destination country
2: Immigration and legal preparation
Immigration to the destination country
- Apply for the appropriate visa or residency permit (work, skilled visa, business/investor visa, family or partner visa)
- Understand the path to becoming a permanent resident and citizenship
- Familiarise yourself with tax residency rules in the destination country
South African citizenship considerations
- Apply to Home Affairs to retain your South African citizenship (if you intend to keep it) before acquiring foreign citizenship
- Confirm dual citizenship rules
3: Tax emigration and SARS compliance
Prepare for cessation of SA tax residency
- Gather required supporting documentation, including:
- Passport and travel history
- Proof of foreign residency (lease, utility bills, permits, etc.)
- Foreign employment contract or visa
- Identify assets subject to exit (deemed disposal) tax, i.e. assets subject to capital gains tax (CGT). These can include:
- Offshore investments
- Shares
- Unit trusts
- Foreign property
- Note that certain assets are excluded, including:
- South African immovable property
- Specific retirement funds
Submit your SARS tax residency change
- Declare cessation of tax residency via SARS eFiling
- Submit all supporting documentation
- Await SARS confirmation of the cessation date and any exit tax assessment (if applicable)
Final South African tax return
- File a part-year tax return
- Declare local income up to the exit date
- Worldwide income up to the exit date
- Settle any CGT (exit tax) triggered by deemed disposal on emigrating
4: Financial and exchange control matters
Bank accounts and local investments
- Notify South African banks and investment providers of your change in tax residency
- Convert accounts to non-resident accounts, where required
- Review debit orders and credit facilities
Offshore transfers
- Confirm the eligibility of available allowances, including the R1mn single discretionary allowance (SDA) and the R10mn foreign investment allowance (FIA)
- Obtain tax clearance and bank approvals for large transfers, where applicable
Retirement funds
- Review the treatment of retirement annuities (RAs), pension and provident funds and living annuities
- Determine whether early withdrawal is permitted, as well as any tax implications in SA and abroad
Insurance and risk cover
- Review your life policies, disability cover and medical aid
- Determine whether these policies remain valid post-emigration
- Consider international health insurance
5: Property, estate and legal planning
Property in SA
- Decide whether to sell, rent out or retain your SA property as a non-resident
- Appoint a rental agent if applicable
- Understand non-resident CGT withholding tax on future sale
Estate planning
- Review and update your South African will
- Consider a separate will for offshore assets
- Review beneficiary nominations on policies, retirement funds and Investments
- Consider situs-based estate taxes in the destination country
6: Practical and administrative steps
Personal administration
- Cancel or transfer:
- Utilities
- Cellphone contracts
- Subscriptions
- Notify:
- Medical providers
- Schools
- Professional bodies
Records and documentation
- Keep certified copies of:
- ID and passport
- Tax returns and assessments
- Proof of residency change
- Immigration approval
7: Post-emigration compliance
Ongoing South African obligations (if any)
- Declare SA-source income (e.g. rentals)
- File non-resident tax returns if required
- Ensure withholding taxes are correctly applied
Destination country compliance
- Register with the local tax authority
- File an initial tax return
- Declare worldwide income where required
- Understand reporting obligations for offshore assets
Key risks to avoid
Below, we highlight important risks to avoid when exiting SA.
- Leaving SA without formally addressing tax residency
- Assuming physical departure equals tax emigration
- Poor timing that triggers unnecessary exit CGT
- Premature withdrawal of retirement funds
- Losing SA citizenship unintentionally
- Having assets or inheritances blocked due to non-compliance
Conclusion
Emigration from SA is not a single event, but a multi-year, structured process with lasting tax and legal consequences. The costliest mistakes typically arise from poor planning rather than deliberate non-compliance. Leaving SA without formalising your exit does not reduce the complexity – it merely postpones it, often at a much higher cost. If you have already left and not followed the official emigration process, it is not too late to do it now.
For those individuals who are planning to emigrate, it is essential to obtain the correct advice on SA tax, SA exchange control and immigration (the process in the country you are going to). If you have already left and have not yet formally emigrated, it is vitally important to establish your exit date and complete the process sooner rather than later.
Please contact us if you wish to discuss further by emailing Di Haiden (di@rcinv.co.za) or Aarthi Bikram (aarthi@rcinv.co.za) – we are more than happy to assist.
