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Harry

What About Our Money in South Africa!!

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Seanhay

Hi Guys,

In the Business Day this morning....

Manuel dashes banks' hopes of easing of new ID rules

--------------------------------------------------------------------------------

Chief Reporter

FINANCE Minister Trevor Manuel seems to have temporarily scuppered the Banking Council of SA's hopes of its members getting an exemption from the Financial Intelligence Centre Act requirement that they verify all customer details before the end of this month.

However, he hinted that he might shift the deadline in SA's new money-laundering laws, which compel banks to freeze 18-million customer accounts if they do not meet the deadline.

Manuel told Parliament on Friday he was seeking "further advice" on whether or not to extend this deadline, and would make an announcement soon.

But a blow to the banks was Manuel's response to concerns that the rules outlining which documents bank clients must produce to be re-identified were too onerous.

The banking council had earlier petitioned Manuel to waive the requirement that a customer's address must be verified through a third party such as an electricity account for low-risk customers.

The banks said rural and poor clients specifically would struggle to produce documents , such as electricity bills.

Manuel, however, said on Friday: "I am advised most inquiries are based on misunderstandings and I am confident that account holders and banks will find the regulations are sufficiently accommodating."

Manuel's announcement means banks will need to verify all clients' details unless these customers fall within the ambit of exemption 17, a complex regulation which waives the reidentification requirement for certain account holders.

The banks believed exemption 17 was unworkable and difficult to implement, allow ing them only to waive re-identification if a client complied with a host of conditions.

As a result, they wanted a firm waiver for low-risk clients without those conditions, which now looks unlikely.

E ven if banks might have to implement exemption 17, the silver lining is that an extens ion of the deadline may be on the cards.

The Reserve Bank confirmed yesterday that the banks were likely to miss the deadline for all clients.

It is believed that Manuel's Money Laundering Advisory Council would meet this week and he might make a statement concerning any extens ion of the deadline afterwards.

Banking Council spokeswoman Claire Gebhardt-Mann said yesterday: "He will have to respond very quickly, given that the deadline is looming." Banks would still welcome any extension to the deadline, she said.

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susanwench

Hi- I had my daughter who is still in SA to contact our bank and find out details. What they require are certified copies of passports and a letter from your Canadian bank verifying your physical address. That is what was said over the phone. I have since emailed my personal banker to confirm these details. The deadline is end June, but he indicated that this deadline may be extended for overseas customers.

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Harry

I guess this confirms what I said higher up on the original post on this subject?

To wit: "1. If you are an SA Citizen living in a country that has anti-money-laundering controls ( I presume Canada is acceptable!!?) then the info may be collected and forwarded by an equivalent "accountable institution" (read : Your Canadian bank or lawyer) "

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susanwench

Hi again - Just had reply from our personal banker and it is not certified copy of passport required, but Green Bar Encoded Identity Document, together with letter from Canadian Bank. Here is the response:

"The letter from the Canadian Bank verifying your address is great , however we will require a certified copy of your Green Bar Encoded Identity Document .

You may fax this to Ian , & the original certified copies must be posted within 15days"

To give an example of what a mess this idea is, my daughter did NOT receive a letter from the bank informing of these changes, she received it from her employers, in order for salary payment. Without that she would not have known!

Well done SA Forum in keeping us so up to date and well informed!

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Guest Guest_Korma

What happens if you no longer have an SA ID Book?

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Hendie

Korma, theoretically they just need to know that you "exist", so I believe a copy of a valid passport would also suffice.

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Guest Guest

Banking details' deadline extended

You now have until the end of this year to get your banking details in order. Trevor Manuel has decided to extend the deadline for clients to verify their identities with their banks. Around 17 million consumers had until the end of this month to confirm their personal details - now they've got until the end of the year. That’s because the treasury received more than 50 requests for postponements. ABSA's Errol Smith has welcomed the extension to what’s become known as the FICA deadline. Back to headlines

(as per HIGHVELD 94.7 news on the web)

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Hendie

Also reported on IOL today.

This is good news! :unsure:

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scotty

Hi everyone,

Please pardon me if this has been asked before. I've been looking but can't find anything.

I have, thanks to all of you, become reasonably familiar with what to do with regard to moving to Canada. But I am still quite in the dark as to what to do on the South African side.

Once we have the PR approval, what do we do in SA to emigrate officially? And where do we start?

If this has all been answered before, please could you point me in the right direction?

You guys have all been so helpful already. Thanks!

Scotty

Harry: Scotty , I moved your post here to be with the answers you are looking for.

Edited by Harry

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Linda

Scotty, when we emigrated (officially) we contacted Standard Bank (as our main bank) and began the process with them working alongside the Receiver of Revenue.

BUT - Scroll down the discussion options in "Money" and read Harry's post to Barbara about officially emigrating. Seems most folks are anti dealing with the bank as it seems to open up a can of worms.

So I'm not sure what to suggest. :huh:

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Harry

Scotty,

I believe Beans123 is referring to THIS post.

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scotty

Thanks Beans123 and Harry for your help. Wow! No one said it was going to be easy, did they?

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susanwench

I have just been asked whether I and my brothers (one in Oz the other Canada) whether we are Foreign Nationality or Non- Resident? What exactly are they asking for now? This is all part of an inheritance that has now matured and the monies are to be deposited into a SA bank account. They have been supplied with the other paperwork that was required re new banking rules etc. Anyone know what now?

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Harry

Susanwench,

I believe they are busy tryingto determine whether the money has to stay in SA and whether it may be transferred overseas to the beneficiaries. Take a look at the second posting from the top in this current thread HERE. NEar the bottom ( 2nd last paragraph) I mention this stuff and I post a link. That link is inconsistent, but when it works, you'll get the formal documents on the subject fro the SA government. Print it out and read it...the hard way.

I SUSPECT, but AM NOT SURE, that, if you and your brothers are non-SA nationality, the money will be paid out in your respective countries of residence. If you are SA citizens that are resident in your respective countries, then I SUSPECT the government is going to try and keep it in SA as blocked funds.

However, you may need the advice of a formal SA accountant for this.

Charles may have some wisdom on this subject. I suspect he may have gone through this process recently.

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susanwench

Thanks Harry - it is all very confusing. They have already stated they will not release funds overseas. They have agreed to pay it into my bank account which is still open in SA. The idea was then to disperse the funds in the form of a "gift" to the other 2 parties. Now however, I think what they are trying to determine, is if they can nail us with tax. It will be interesting. We ourselves "relocated" in Sept 2002.

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Harry

Who exactly is asking you the question?

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susanwench

It is part of my Mums estate that was wound up in 2002, EXCEPT for this portion which they would not release until July 2004. It is a Fairbairn Capital Investment. "Unfortunately because our Investment is invested in Rand we are

not allowed to pay into an offshore bank account," was their initial response, together with the new required passport and bank certified letterhead from here.

"They came back to me now, informing me that I must request from you and your brothers if you are Foreign Nationality or a Non-Resident" and that is the new request.

I will try and keep my sense of humour however, and supply whatever they need. The funny thing is its not even a lot of money. Just a couple of thousand rand. ;)

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Harry

Susan, quoting directly from the SARS documents:

As far as individuals are concerned two rules will apply to define what a resident is.

The first rule is based on ordinarily residence and means that a person is a resident of South Africa, if his or her permanent home, to which he or she will normally return, is in South Africa.

The second rule is time based and a more objective rule. A person will be regarded to be a resident if:

* He has spent, during the current tax year as well as during each of the previous three years, more than 91 days per tax year in South Africa and

* He has spent during the previous three tax years in aggregate more than 549 days in South Africa.

Note: A portion of a day is regarded as a day.

I guess this makes you guys NON-residents in the eyes of the SA tax Authorities.

I think you should read section 5.5, 5.5.1 and 5.5.1.1 of that last link that I mentioned above. I have just done so, and it says emphatically that the legacies of a deceased SA Resident may be remitted abroad...go see for yourself. Unless my English is letting me down, or the rules have AGAIN changed, it sounds like you ought to be paid out outside SA.....presumably if you are formally outside SA.

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Lanelle

Hi !

As for leaving your money in the pension fund for two years before you cash out; it's changed.

"UNCLAIMED BENEFITS TAX (GN 35)

The South African Revenue Service (SARS) has recently issued a ruling in GN 35 confirming that benefits accrue to members at the time of their termination of service with the employer (and not at the time of payment of the benefit to the member). Tax is also payable to SARS when the benefit accrues to the member i.e. immediately when the member’s service with the employer terminates.

In GN 35, SARS have also confirmed that if benefits are not claimed by members within the six months from date of exit, the administrators will nonetheless have to apply for the necessary tax directive from them and pay over the required tax amount to SARS.

The balance of the benefit would then be retained in the fund until claimed by the member."

Sorry !

Regards

Lanelle

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thelategans

This is just another money grab by the system that is forcing people (by way of retrenchment) to cash in their hard earned savings.All part of the bigger picture called re-distribution.

Stuart

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Karen

In a few years' time, we will have a retirement annuity come due. Will getting the money out be a problem? We do not even have a bank account or any other assets in SA. Would we be able to return to SA and spend the money there on a holiday and never bring it back to Canada, and lastly, how will it affect our taxes here - are you then taxed in both countries?

As regards the annuity - it looks as if we are going to lose much of it, methinks. My hubby took it out at the age of 18, and I think it will be all paid up by age 55. Not even sure what it will be worth.

Life is sure strange - you take out a policy at 18, thinking that your future will then be secure, and then life takes its various twists and turns, and you could never get what you put in!

Just makes me realise - don't plan for the future - carpe deim and enjoy each and every day!!!

My apologies - I forgot about that thread. Please move this one there for me.

Edited by Harry

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Harry

Karen,

Your wish is my command....done...moved.

As for the annuity kind of stuff....if you have ceased to be a resident, which I believe you have formally, then you can no longer avail yourself of the overseas investment allowances that SA residents have. Your annuity is then basically stuck in SA. To take that out of the country, you have to get a bank to ask the government "pretty please". The government will obviously first insist on all taxes that are due. Then, after that, they will consider your application , and, if approved , will demand 10% from you. After that, they may still only let you take it out on someor other schedule.

I do not know of anyone that as actually tested that system to date. It is fairly new, being about 12-18 months old. Go take a look under the section Money : "What about our money in SA?". I wrote a heap on that stuff.

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TimothyA

I've read all I could find on the forums regarding "financial emigration" however I'm still confused w.r.t. RA's in SA.

If they've been answered before then forgive my stupidity, if they haven't then I would appreciate any help.

Situation:

1. Left SA (quietly), currently in Canada as a PR.

2. Still filling in tax forms in SA - 0 income.

3. Got some RA's that are still active in SA - only due to pay out in 20-30 years.

4. Eligible to apply to Canadian citizenship.

(Not going to apply for dual citizenship)

Problem:

If I apply for Canadian citizenship and relinquish my SA citizenship what happens to the RA's.

My goal would be (obviously) to get as much out and invest it here - my future is in Canada, not SA.

Questions:

1. Can the funds in the RA's be liquidated (how?) before applying for Citizenship?

(I'm under the impression that it's there till it pays out - correct me if I'm wrong)

2. Am I allowed having RA's in SA if I'm not a citizen? (Assuming that Q1 = No)

(I'm under the impression that my only option would be to cease payments)

3. On a similar note, what happens when I apply for Canadian citizenship, what happens to my SA bank accounts? Do I have to close them or will they be closed for me?

Basically, not being a financial person and this may be simple to someone who is, what should I do?

Timothy

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digin
1. Can the funds in the RA's be liquidated (how?) before applying for Citizenship?

(I'm under the impression that it's there till it pays out - correct me if I'm wrong)

No they cannot. SA treats it similar to block rands - you can take out the income when you retire each year, but the capital stays in South Africa.

2. Am I allowed having RA's in SA if I'm not a citizen? (Assuming that Q1 = No)

(I'm under the impression that my only option would be to cease payments)

Yes you can still hold an RA, but not contribute to it any longer. You RA will be placed in a preservation fund and will pay you a regular pension when you turn 55.

Be aware that many companies take a lot of the investment fees for RA products in the first 5 years of paying into the fund - if you are leaving SA after only contributing to a fund for less than 5 years - you could find yourself losing a lot of money.

3. On a similar note, what happens when I apply for Canadian citizenship, what happens to my SA bank accounts? Do I have to close them or will they be closed for me?

When a bank finds out, they will essentially turn it into block rands. You can get the interest out each year, but not the capital.

Many investment houses are offering RA's for emigrants that are linked to either the Euro or US Dollar or GBP. It's worth investigating these if you are worried about the rand, though their fees are often exhorbitant.

It might be better to have an SA based RA if it is not your only source of income invested in sound global SA-based companies like SAB, the Gold & Platinum mines, etc who will deliver good returns if the rand falls - hopefully enough to offset that fall.

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Pierre

Timothy I concur with digin.

I recently went through the process of trying to get as much money out that is tied to RA's. The end result was taking out 1/3 of the capital and a monthly pension which you can have transferred to a canadian account or leave in SA for use in the future if you are going to visit there or for investing in SA.

When you notify your bank in SA that you are permanently residing elsewhere, they change your account status to a blocked account (also called foreign account).

On a somewhat related subject... when entering SA and changing currency to SAR make sure they note that you are a non resident. Because when you want to convert back at the end of the trip the exchange requires proof of the previous (entering) exchange as a non resident before they will change your money back. Only small amounts can be changed without this proof.

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