Dear Colleague
It is hard to believe that we are well on our way to August 2022, the last month of the Winter season in South Africa. Our country and its people have suffered a great deal owing to the lack of constant electricity supply during the cold Winter months. We are looking forward to Spring and its warmer temperatures!
August is Women’s Month and we will be celebrating Women’s Day on 09 August. This day was declared a national holiday in 1995 after the election of Nelson Mandela when SA became a democratic country. The commemoration of this day marks the anniversary of the great women’s march of 1956, when a group of about 20 000 women marched to the Union Buildings to protest against having to carry passbooks
.
We wish all the women in our lives a happy Women’s Day!
THE IMPORTANCE OF PROPERLY-COMPLETED WILL APPLICATION FORMS
EFBOE always endeavours to provide quick and efficient services to our clients. The drafting of Wills form an integral part of our service offering. The first step that enables us to draft a Will is to receive a thoroughly-completed application form. This application form is the instruction to your Wills drafter to draft the Will.
Please note that a completed application form is part of the compliance requirements and forms an integral part of the auditing process. It is, therefore, a strict requirement that a duly-completed application form must be submitted with the request for the drafting of a Will. No Will may be prepared without this document.
Another important purpose of a completed application form is to confirm the correct source of the Will, as well as to ensure that your commission is paid out correctly.
We urge you to always complete an application form when you request a Will to be drafted to ensure a speedy and efficient drafting service, and to enable us to comply with industry requirements.
THE CORRECT WITNESSING OF A WILL
Just to recap: Two impartial persons older than 14 years of age must witness the signing of a Will and all of the parties must be present when the Will is signed. Furthermore, no person who is to receive a benefit, or are nominated to hold a position in the Will, are allowed to act as a witness, including any of these parties’ spouses.
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TAX RESIDENCY AND THE ABILITY TO RECEIVE A SOUTH AFRICAN INHERITANCE
The idea of a loved one passing away is never an easy thing to think about. Unfortunately, death is as part of life as life itself, and part of life’s journey. With the occurrence of this unfortunate event emerges the handling of the deceased’s estate.
The administration of a deceased estate can be a very complicated and a time-consuming process, which could lead to a lot of frustration for many South Africans. When an heir is an expatriate as well, it adds additional complexity and often more frustration to the process.
An heir living outside of SA who inherits from a South African source, will have to provide proof of their non-tax residency and compliancy status to enable them to receive their inheritance overseas. The expatriate would have had to place their emigration on file to be able to receive their inheritance.
The South African Revenue Service (SARS) will require an heir to go through a formal declaration process to prove their non-residency based on the qualifying criteria to be acknowledged as a non-tax resident.
How to cease tax-residency in SA
An ordinarily resident is a person considered to be ordinarily a resident in SA, if SA is the country to which that person will naturally and as a matter of course return to after roaming outside of the country. It could be described as that person’s usual or principal residence, or their real home, and determines their tax residency status.
When a person intends to permanently relocate to another country, there is a once-off process whereby taxpayers can cease their tax residency. To be able to prove non-residency and formally cease tax residency, a person must go through a financial emigration process, should they meet the criteria. If the intention of the person can be substantiated objectively, the person will pass the ordinary resident test and will qualify to cease their tax residency.
The source-based tax system in SA was replaced with a residency-based tax system in 2001. This means that a person can now be classified as a resident or a non-resident for tax purposes. A resident for tax purposes is taxed on their worldwide income and a non-resident for tax purposes is taxed on their income derived from a source within SA.
The way SARS determines the tax residency of an individual in the country who was never ordinarily resident in SA, is by applying a physical presence test. The presence test is determined by the following:
The individual must have been present in SA for:
August is Women’s Month and we will be celebrating Women’s Day on 09 August. This day was declared a national holiday in 1995 after the election of Nelson Mandela when SA became a democratic country. The commemoration of this day marks the anniversary of the great women’s march of 1956, when a group of about 20 000 women marched to the Union Buildings to protest against having to carry passbooks
.
We wish all the women in our lives a happy Women’s Day!
THE IMPORTANCE OF PROPERLY-COMPLETED WILL APPLICATION FORMS
EFBOE always endeavours to provide quick and efficient services to our clients. The drafting of Wills form an integral part of our service offering. The first step that enables us to draft a Will is to receive a thoroughly-completed application form. This application form is the instruction to your Wills drafter to draft the Will.
Please note that a completed application form is part of the compliance requirements and forms an integral part of the auditing process. It is, therefore, a strict requirement that a duly-completed application form must be submitted with the request for the drafting of a Will. No Will may be prepared without this document.
Another important purpose of a completed application form is to confirm the correct source of the Will, as well as to ensure that your commission is paid out correctly.
We urge you to always complete an application form when you request a Will to be drafted to ensure a speedy and efficient drafting service, and to enable us to comply with industry requirements.
THE CORRECT WITNESSING OF A WILL
Just to recap: Two impartial persons older than 14 years of age must witness the signing of a Will and all of the parties must be present when the Will is signed. Furthermore, no person who is to receive a benefit, or are nominated to hold a position in the Will, are allowed to act as a witness, including any of these parties’ spouses.
____________________________________________________________________________
TAX RESIDENCY AND THE ABILITY TO RECEIVE A SOUTH AFRICAN INHERITANCE
The idea of a loved one passing away is never an easy thing to think about. Unfortunately, death is as part of life as life itself, and part of life’s journey. With the occurrence of this unfortunate event emerges the handling of the deceased’s estate.
The administration of a deceased estate can be a very complicated and a time-consuming process, which could lead to a lot of frustration for many South Africans. When an heir is an expatriate as well, it adds additional complexity and often more frustration to the process.
An heir living outside of SA who inherits from a South African source, will have to provide proof of their non-tax residency and compliancy status to enable them to receive their inheritance overseas. The expatriate would have had to place their emigration on file to be able to receive their inheritance.
The South African Revenue Service (SARS) will require an heir to go through a formal declaration process to prove their non-residency based on the qualifying criteria to be acknowledged as a non-tax resident.
How to cease tax-residency in SA
An ordinarily resident is a person considered to be ordinarily a resident in SA, if SA is the country to which that person will naturally and as a matter of course return to after roaming outside of the country. It could be described as that person’s usual or principal residence, or their real home, and determines their tax residency status.
When a person intends to permanently relocate to another country, there is a once-off process whereby taxpayers can cease their tax residency. To be able to prove non-residency and formally cease tax residency, a person must go through a financial emigration process, should they meet the criteria. If the intention of the person can be substantiated objectively, the person will pass the ordinary resident test and will qualify to cease their tax residency.
The source-based tax system in SA was replaced with a residency-based tax system in 2001. This means that a person can now be classified as a resident or a non-resident for tax purposes. A resident for tax purposes is taxed on their worldwide income and a non-resident for tax purposes is taxed on their income derived from a source within SA.
The way SARS determines the tax residency of an individual in the country who was never ordinarily resident in SA, is by applying a physical presence test. The presence test is determined by the following:
The individual must have been present in SA for:
- A period or periods exceeding 91 days in aggregate during the current year of assessment; and
- A period or periods exceeding 91 days in aggregate during each of the five years preceding the current year of assessment; and
- Exceeding 915 days in aggregate during the five years preceding the current year of assessment.
This test is seen as a secondary test to the ordinary test. It should be kept in mind that the onus always rests on the taxpayer to prove to SARS that they qualify based on the above options. It is a good idea to trust people who are experienced with this complicated and technical process, to assist with this type of matter.
Releasing the inheritance
The inheritance funds will be blocked until such a time as the taxpayer has fulfilled their obligation in terms of proving their tax residency status. Once the formal emigration has been declared and approved by SARS, an emigration tax clearance status PIN will be provided which will be used as a clearance certificate to release the inheritance, and may be used to remit the inheritance abroad.
Inheritance tax does not apply to individuals living within SA, but the inheritance must be declared to SARS, both for South African tax residents and tax non-residents alike.
Source:
https://www.moonstone.co.za/how-tax-residency-affects-your-ability-to-receive-an-sa-inheritance/
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Cheers old pals!
Roger Brown, a retired engineer, had quite a few good friends. The group of seven had been close friends for more than 40 years. When he passed away, Roger surprised his closest pals by leaving £3,500 in his Will for them to spend on a weekend away. They went to Berlin and raised more than one glass to Roger’s memory.
One of his friends, Roger Rees, told a local newspaper that: “We would like to formally apologise to Roger’s two sons, Sam and Jack, for taking away some of their inheritance. We spent most of it on beer, the rest we wasted.”
Releasing the inheritance
The inheritance funds will be blocked until such a time as the taxpayer has fulfilled their obligation in terms of proving their tax residency status. Once the formal emigration has been declared and approved by SARS, an emigration tax clearance status PIN will be provided which will be used as a clearance certificate to release the inheritance, and may be used to remit the inheritance abroad.
Inheritance tax does not apply to individuals living within SA, but the inheritance must be declared to SARS, both for South African tax residents and tax non-residents alike.
Source:
https://www.moonstone.co.za/how-tax-residency-affects-your-ability-to-receive-an-sa-inheritance/
_____________________________________________________________________________
Cheers old pals!
Roger Brown, a retired engineer, had quite a few good friends. The group of seven had been close friends for more than 40 years. When he passed away, Roger surprised his closest pals by leaving £3,500 in his Will for them to spend on a weekend away. They went to Berlin and raised more than one glass to Roger’s memory.
One of his friends, Roger Rees, told a local newspaper that: “We would like to formally apologise to Roger’s two sons, Sam and Jack, for taking away some of their inheritance. We spent most of it on beer, the rest we wasted.”
Until next month!
The Let’s Talk EFBOE Team