The determination of whether an individual ceases to be a tax resident in South Africa is based on the manner in which such an individual has been a tax resident in South Africa. If the taxpayer has been an ordinary tax resident, it is a factual enquiry on whether or not that person’s subjective intention to cease to be ordinarily resident in South Africa and no longer make South Africa his or her real home, is supported by various objective factors. If a person has ceased to be an ordinary tax resident, it will be from the day such person ceased his or her residence.

Factors that will be taken into account to determine whether a taxpayer has ceased to be a tax resident of South Africa:

• The type of visa on which you have gone to the foreign country.
• Proof of permanent residence in the foreign country (if applicable).
• A certificate of tax residence from the foreign revenue authority or a letter from the authority that indicates that you are regarded as a tax resident in that country (if available).
• Details of any property that you may still have available in South Africa.
• Details of any business interest (e.g. investment and employment) that you may still have in South Africa.
• Details of your family (e.g. whether any family members are in South Africa and the reason thereof).
• Details of your social interests (e.g. gym contract, recreational clubs and societies) and location of your personal belongings.
• Details of any return visits to South Africa, the frequency thereof and the reason for undertaking such visits.

An individual, who is resident by virtue of the physical presence test, ceases to be a resident when that person is physically outside the Republic for a continuous period of at least 330 full days. The individual will be deemed to have ceased to be a resident from the day such person left South Africa.

An individual who has become a tax resident of another country through the application and for purposes of the application of a double tax agreement will also cease to be a resident for tax purposes in South Africa.

What are the consequences if I have ceased to be a tax resident?

A deemed disposal for capital gains tax purposes takes place at the time when an individual breaks his or her tax residence. The individual will be deemed to have disposed of his or her worldwide assets, excluding immovable property situated in South Africa.

Once a person has ceased to be a tax resident in South Africa, such person is no longer taxed in South Africa on his or her worldwide income, but only on South African sourced income.

How do I declare to SARS that I have ceased to be a tax resident in South Africa?

The taxpayer must inform SARS by way of one of the following two channels:

• If a taxpayer ceased to be a tax resident of South Africa during the current year of assessment, the taxpayer can inform SARS through the wizard on the income tax return (ITR12) and the date on which the taxpayer ceased to be a tax resident must be provided.
• Alternatively, the taxpayer can inform SARS by submitting the Declaration of Cease to be a Tax Resident.

You are welcome to contact the Tax Consultant Fanus Jonck (tax@jonck.net) with your tax queries.