Make sure that your affairs are in order.
Many South Africans are living and working abroad these days. Many of us have friends and family overseas and emigration is a common topic these days.
Many who leave South Africa inevitably leave family and friends behind, and in many instances, it is parents that cannot relocate.
I recently had a client who had his will drawn up. Amongst other things he mentioned that his children are living and working abroad, and he wanted to know if they would still be able to inherit from him should he pass away. This question prompted me to write this short article to eliminate possible confusion regarding the current legal position of heirs living abroad and inheriting from a South African deceased estate.
South Africans living abroad may inherit from a South African individual. There are, however, certain important considerations such as the impact of exchange control regulations that need to be adhered to.
According to Sars, individuals living and working abroad and who stand to inherit from a South African individual will fall into one of the following three categories:
- Those who are living abroad temporarily. According to Sars, most people will fall within this category.
- Non-residents. Those who formally emigrated in terms of the exchange control provisions are therefore classified as a non-resident; and
- Non-residents who have never been classified as South African citizens before.
Herewith is an elaboration of the points raised above:
South Africans living abroad temporarily
Many South Africans simply apply for a job overseas, leave South Africa and start working and living in the new country. They do not necessarily emigrate formally and are still classified as South African residents for exchange control purposes. To remit the inheritance abroad, they need to apply for the R10 million foreign investment allowance which will require tax clearance and a valid South African identity document. There are certain requirements to successfully apply for the allowance and tax compliance PIN, which include:
- The applicant’s income tax needs to be up to date;
- No outstanding income tax returns; and
- No outstanding income tax debt.
Heirs living abroad and who do not meet the above criteria may expect delays in receiving their inheritance.
South Africans who have formally emigrated in terms of exchange control and are classified as non-resident
Those who have formally emigrated (sometimes called financial emigration) simply must provide the South African Reserve Bank reference number or formal emigration documentation. This is a simple process and funds may be remitted to the individual offshore.
Non-residents who have never been classified as South African citizens before
These individuals are typically born abroad and have never been South African citizens. These individuals have also never had a South African identity document. This is considered to be the easiest category because the individual simply has to provide a certified copy of the identity document or passport, proof of address overseas and bank account details.
[Moneyweb]
