For South Africans

How tax residency works

SARS taxes residents on worldwide income and non residents only on income from a South African source. The tax year runs from 1 March to the end of February, and there are two ways to be resident.

The first is being ordinarily resident: South Africa is your real home, the place you return to after travelling. It is a question of fact, guided by SARS Interpretation Note 3. The second, for people who are not ordinarily resident, is the physical presence test.

Many South Africans abroad stay tax resident and rely on the foreign employment income exemption in section 10(1)(o)(ii) of the Income Tax Act. It exempts the first R1.25 million of salary for work done abroad if you are outside South Africa for more than 183 full days in a 12 month period, including a continuous stretch of more than 60 full days. Salary above R1.25 million is taxed in South Africa, which is why higher earners in countries without income tax often cease residency instead.

• Physical presence test: more than 91 days in South Africa in the current tax year and in each of the five previous years, and more than 915 days in total over those five years.
• 330 day rule: someone resident under the physical presence test stops being resident after 330 full continuous days outside South Africa, backdated to the day they left.
• Tax treaties: if a double tax agreement makes you resident only in another country, you are not resident in South Africa.

Leaving properly

Since 1 March 2021 the old Reserve Bank process of financial emigration no longer exists. What remains is tax emigration: you cease to be resident in fact, then prove it to SARS. People still say financial emigration, but it is not a separate test, and the SARS file stays open until the year you leave has been assessed correctly.

1. 01

   Change the facts

   Move your home, family and working life abroad and take up residence in your new country. SARS weighs your visa, any foreign permanent residence, property kept in South Africa, family, belongings, social ties and return visits.

2. 02

   Declare cessation to SARS

   Capture the date you ceased residency on the RAV01 registration form on eFiling, the SARS online portal. SARS then opens a case and asks for the signed cessation declaration, a motivation letter, passport pages and supporting evidence.

3. 03

   Calculate the exit charge

   Value your worldwide assets on the day before the cessation date and work out the section 9H capital gain for your final resident period.

4. 04

   File the split year return

   Your ITR12 return for that year must separate the resident and non resident periods and allocate income and deductions to each. SARS has been issuing revised assessments on this year even after confirming non resident status.

5. 05

   Keep the confirmation

   SARS confirms your non resident status and effective date. Banks, retirement funds and SARS itself rely on it for later transfers and withdrawals.

6. 06

   Move funds the right way

   Use your annual allowances while you are resident, and an Approval for International Transfer (AIT) from SARS for larger amounts or for funds moved once you are non resident.

Exit tax, property and investments

Section 9H treats you as selling your assets at market value on the day before you cease residency and buying them back the next day. Capital gains tax applies to the gain: 40% of it is added to taxable income, for a maximum effective rate of 18%. The charge covers foreign property, listed and unlisted shares including your own company, unit trusts, gold coins, crypto assets and offshore portfolios.

Excluded are South African immovable property, which stays taxable when you eventually sell it, assets of a South African permanent establishment, retirement fund interests and personal use assets such as cars. The tax is due with the return for that year, so plan for the cash.

When a non resident sells South African property for more than R2 million, the buyer must withhold 7.5% of the price under section 35A as an advance on your tax, unless SARS issues a directive for less. Rent from South African property remains taxable here after you leave.

Exchange control still applies to residents. Since 8 April 2026 each adult can send up to R2 million a year abroad under the single discretionary allowance without SARS approval, plus up to R10 million a year under the foreign investment allowance with an AIT. The 2026 Budget also proposed ending the donations tax exemption for gifts to a spouse who has already ceased residency; our team confirms its status before any plan relies on it.

Retirement funds and social security

Retirement annuities and preservation funds can be paid out before retirement on emigration only after you have been non resident for three uninterrupted years. The rule applies from 1 March 2021, and the three years run from the date you actually ceased residency, so people who left earlier may already qualify. The fund needs a SARS tax directive before it pays, and the payout is taxed on the withdrawal lump sum tables.

Under the two pot system, which started on 1 September 2024, the savings component can be accessed once a tax year wherever you live. The retirement component stays locked until retirement or until the three year emigration rule is met.

A living annuity cannot be cashed out on emigration unless its value is below the small balance threshold. You keep drawing between 2.5% and 17.5% of the capital each year, taxed in South Africa through PAYE, the employee tax withholding system, unless a tax treaty gives your new country the right to tax it and SARS issues a directive.

South Africa has no contributory state pension. The older person’s grant is means tested and paid only to people living in South Africa, so it rarely affects a decision to leave.

Dual citizenship

On 6 May 2025 the Constitutional Court, in Democratic Alliance v Minister of Home Affairs, confirmed that section 6(1)(a) of the South African Citizenship Act was unconstitutional, with effect back to 6 October 1995. That section had removed citizenship from adults who took another nationality without first obtaining permission to keep it.

South Africans can now acquire another citizenship without applying for retention, and people who lost citizenship under the old rule are treated as never having lost it. Home Affairs records may still need updating before a new passport is issued, which can take time.

Two rules remain. You must enter and leave South Africa on your South African passport, and the Minister keeps a limited power to deprive dual citizens of citizenship. Parliament could also legislate again, so we check the position before you apply.