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Guest Barbara

Officially Emigrate ????

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Guest Barbara

What are the advantages of officially emigrating? I am told once the retirement annuities pay out we will be able to draw the money if we have officially emigrating. Are there any other things I need to be aware of? The bank won’t answer any questions until you identify yourself on the phone.

Edited by Barbara

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Harry

Barbara,

When you officialy emigrate, the bank, as agent of the Reserve Bank of the Republic of South Africa, will impound all your financial accounts ( bank accounts, credit cards, investments atc...that is, all your financial instruments in SA). In the process they will make sure you have paid all your taxes and that you owe nothing. Then they thereby clear you for somethng that I shall call " Financial Emigration". All your documents will be stamped with the words "Emigrated" or some such phrase, and you enter into a form of life best described as " The Phantom Zone" ...a "kept person",sp to speak. You no longer are in charge of your money in SA...you have to ask the bank "pretty please" for everything you do that involves money.

When you financially emigrate, a family may take out of the country R1.5M rand. They may also takeout property to the value of ( I think) R1 M...you can read the exact details HERE. PLEASE do so! It is important.

As regards any income you get after " Financial Emigration" , this may be sent out of the country.

As regards any capital you have, it must stay in the country.

This means that your pension capital stays trapped in SA, and you get only the monthly payments ( the proceeds of the capital, so to speak, but not the capital itself). One other thing that becomes possible, is that any inheritance that may come your way, will be paid out to you overseas ONLY if you have formally emigrated. To have either the monthly pension payments or the inheritance paid out OVERSEAS, you MUST Financially Emigrate.

There is now a new provision in terms of which you may apply to take all your money out of the country. The government then wants 10% of it and they tell you what schedule you may follow in removing it. I do not know anyone that has tried that yet.

So, the formal emigration benefits those

1. who are not too far from retirement and have less than R1.5M in the family.

2. who may inherit something.

Other than that, it is pretty much financial bad news all the way.

Contrast this with SA residents, who may invest R750,000 PER TAXPAYER ( there may be more than two in the family) overseas [EVER] and take out R160,000 per year on travel and about R70,000 per kid. They may also send an overseas person R30,000 as a present each year. They may also do internet credit card purchases of about R20,000.

I hope this helps. Please believe me, you DO NOT want to phone up a bank out of the blue and ask them these questions. They'll descend on you like a pack of hyenas. They have standing instructions to do so.

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Guest Angazi

Barbara, Never let the bank know you are going. Not even when you are gone. Take Harry's advise seriously. You have some time to plan your capital move. Don't even talk to your financial advisor as they are bound by the financial disclosure act to report your moves to the Reciever. Chat about your issues in the coffee club. :cry::cry:;)

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Guest Stavast

Wow, a lot of info that one needs to think of! What if you are in the situation where you find yourself in Canada on a work permit, while your residency application is pending.

Would the same "rules" relating to "Financial Immigration" be valid, or do you still have access to thing like your credit cards, bank accounts, etcetera? <_<

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scotty

Guys,

Please excuse me - perhaps I'm just being "dof", but some of the advice I have received here has left me more than a little confused.

On the one hand, most of the advice has been not to declare our emigration intentions. On the other hand, I am told that if we do emigrate officially, we can take R750 000 each (my wife and I).

If we don't emigrate officially, how do we take our money with us?

Sorry if I'm being lekker stupid.

Scotty

Edited by scotty

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thelategans

You can officially "invest" R 750 000 (each adult) offshore. You get clearance from the rec of rev (very easy) and then get your bank to open a foreign exchange acc for you. Once you are in your new country, you get the bank to transfer the funds into your new account that you opened where you are staying.

Stuart

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Seanhay

Scotty,

You can also use your annual travel allowances (per individual for you your wife and children) it'll add up to R160 000-00 each and children are about R50 000-00 each. That means an extra R420 000-00 plus the R1,5 million - almost R2 million you can take out legally.

The trick is to catch the Rand when its strong! When the Rands bounces all over the show it get's pretty tricky.

One tip I'd suggest which worked for us is get to know someone at your SA bank branch, do all of the paperwork as well as prepare the paperwork for future transactions you wish to complete. Leave the doxs with a relative or if the employee at the Bank is obliging, with them. An email is all that is then required to purchase forex as and when you believe the Rand is doing well.

:rolleyes:

Don't leave the SARS clearance certificate to the last week like I did. You could get a 'our computers they're not working - you must try again next week....response..) :D

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Harry

Going back to the unanswered question from Stavast....

If a person is on a work permit, it seems to me that the particular person is in Canada on a distinctly temporary basis, as work permits have to be regularly renewed. I do not see how that requires you to "financially emigrate". There are very few benefits to "financial emigration", UNLESS

1. you are nearing retirement and foresee that you'd like your monthly pension payments paid out to you in Canada or

2. you have no money in SA anyway.

If you wish to still use your SA banking accounts, then "financial emigration" is impractical because, after "financial emigration" you'll have to do every single transaction via the bank who has control of your money. It can be done, but it is painful and the bank has to approve every step you take in terms of the rules of the Reserve Bank. Essentially the banks then act as agents of the Reserve Bank.

Either way, one is not supposed to use one's SA credit cards after becoming non-resident in SA. I would get Canadian credit cards as soon as possible and stop using SA ones as early as possible. After that I would first make use of every legal mechanism allowed by the Reserve Bank (for people who have not financially emigrated) for removing money from SA. Once you finally financially emigrate, most of those doors shut on you very harshly.

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Ansie

Halo Harry!

I'm becoming all worried if i read about all the problems people face while trying to emigrate.

I find it very interesting to hear that lots of people go on working visa's then apply for PR and wait the time out in Canada...isn't it a big risk? What about if they fail ones application for PR, or doesn't that happen often? For how long can one extend a working visa? Gerrit & I just could'nt find the guts to take our children out of school start a whole new life in Canada on a working temp visa , just to ..(maybe) be failed and sent back??Although everyone we spoke to says it never happened.. :huh:

We do have unfinished bussiness to attend to in the waiting period, we started building holiday penthouses in Jeffreysbay,eastern cape... investing money we received after selling the farm,gives us something to take our minds off the waiting! :P But sometimes i get so frustrated that i wander if there really is no other way.. I asume one cannot apply again for a working visa after PR V Applications have already been submitted..?

Thanks for your possitive advise and always friendly help on this forum, we're seeing forward in meeting you oneday in Vancouver!

Ansie

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Deonm

Hi Ansie - Where in JBay are you building penthouses ?We are landed immigrants to Canada,who are currently back in SA(JBay) and you are welcome to contact us.

Regards

Deon

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Harry

Ansie,

I'm not an immigration specialist, but I can tell you that it seldom works out so someone has to leave by virtue of an expired work permit. There are always ways to get things done. Nico or Cobus could comment better on that.

I can also tell you that a chap that I know, on a work permit, lost his job recently...and the company he worked for is bending over backwards to make it possible for him to stay longer in order to get the visa that he had applied for. Folks are decent around here and understand these things.

So, I think the matter of getting a job, and a workpermit based on it, is a much more positive step than filing for a visa and waiting in trepidation for that visa to be approved before finding a job.

Your one presumed answer is wrong....you can definitely apply for a work permit after applying for a PRV. Ofetn, if yu are far along in the PRV process, the obtaining of a job will allow you to be fasttracked.

So, I think a littile less trepidation is called for here....things have a habit of working out, ma'am.

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gajo
Scotty,

You can also use your annual travel allowances (per individual for you your wife and children) it'll add up to R160 000-00 each and children are about R50 000-00 each. That means an extra R420 000-00 plus the R1,5 million - almost R2 million you can take out legally.

The trick is to catch the Rand when its strong! When the Rands bounces all over the show it get's pretty tricky.

One tip I'd suggest which worked for us is get to know someone at your SA bank branch, do all of the paperwork as well as prepare the paperwork for future transactions you wish to complete. Leave the doxs with a relative or if the employee at the Bank is obliging, with them. An email is all that is then required to purchase forex as and when you believe the Rand is doing well.

:o

Don't leave the SARS clearance certificate to the last week like I did. You could get a 'our computers they're not working - you must try again next week....response..) ;)

<{POST_SNAPBACK}>

Hi Seanhay,

When you mention the SARS clearance certificate, are you referring to the one that is issued when someone 'officially emigrates'??? Please advise. What clearance certificate are you folks referring to if one does not 'officically emigrate'???

Thanks in advance.

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Harry

Gajo,

when you want to invest overseas ( eg via any SA bank), they are obliged to first check that your taxes are paid up to date. They automatically do this for you and you then get to pay what is outstanding ( if any) before you can then invest outside the country. This is the tax clearance folks are referring to. There are other events that also trigger the obtaining of tax clearance, but I suspect this is the most typical one for folks looking to "relocate temprarily overseas".

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Merv
Don't leave the SARS clearance certificate to the last week like I did

Does that mean you must have no visible signs of illness :o

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gajo
Gajo,

when you want to invest overseas ( eg via any SA bank), they are obliged to first check that your taxes are paid up to date. They automatically do this for you and you then get to pay what is outstanding ( if any) before you can then invest outside the country. This is the tax clearance folks are referring to. There are other events that also trigger the obtaining of tax clearance, but I suspect this is the most typical one for folks looking to "relocate temprarily overseas".

<{POST_SNAPBACK}>

Hi Harry,

Thanks for the response!!!!!!!!! ;) Sorry to be a pain, but more questions:

1. When a person takes this route, i.e. of applying for a tax investment clearance, the banks obviously do not freeze their financial assets as they would if the person tells the bank(s) that they are 'officially emigrating'? :o

2. The tax investment clearance that one receives from bank, as mentioned in (1), is acceptable as proof if an official at the airport asks for such a document?

3. When you say that before getting the tax investment clearance, one must pay all outstanding taxes due to the receiver, are you referring to the date after the time that a person has submitted his/ her most recent tax return, to the date that the person is applying for a tax investment clearance??

Please advise. Thanks in advance.

Kind regards,

Gajo

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Harry

Gajo,

1. Folks resident in SA ( even if the go on overseas trips every now and then) invest overseas all the time ( Up to a maximum of R750,000 per TAXPAYER[note "taxpayer"]). There is no reason whatsoever for them to freeze anything.

HOWEVER, if you walk into a bank in SA, and say that you want tax clearance because you want to emigrate, all the warning bells go off on the spot and you'll find yourself ushered into the manager's office...and your life will NOT be the same from that point onwards, I promise you. Please read the "What about our money in SA?" thread and look at what Stuart Lategan says. This is serious stuff. You DO NOT WANT TO BE TELLING PEOPLE YOU INTEND EMIGRATING. It is NONE of their business and your future intentions are your own.

2. There is absolutely no reason why anyone at any airport should ask you that question. It is not of the business of a passport control officer to check your taxes. If you want to, you can consider removing the stapled Canadian Permanent Resident Visa forms from the passports, and then putting them back in once you are outside SA. There is no law or regulation against that that I am aware of.

3. SARS felt we were R10 short on tax payment somehow ( they had made a mistake on calculating interest or something like that). So we had to pay the R10 and suffer a delay in making the overseas investment. I hope that clarifies the picture.

I believe, though, that you are asking whether the "short" refers to the last tax return, or whether they want something paid for the time SINCE that last return. I do not believe there is a default situation that casues you to have to pay for that fraction of time if you have an ordinary PAYE kind of "return". However, if you are a provisional tax payer, it may be different. I cannot be 100% sure.

My general comment would be that the two year paeriod before leaving the country is the wrong time to "get clever" with tax returns. Just pay the piper and be done with it. There are enough other stresses in this process to keep you on your toes. You don't need tax complications.

In a nutshell: The PHYSICAL process of leaving for "overseas" has nothing to do with taxes. It is the leaving of MONEY for "overseas" that is the problem. You will continue to be an SA taxpayer for quite a while after settling in Canada.

You stop paying tax in SA on your worldwide income only after a certain period outside the country. Your new country then gets that tax. However, SA can still dedcut taxes "at source" in SA on moneys you have in SA.

AGAIN..please read the "What about our money inSA?" thread. The two posts you most certainly want to read in detail are THIS ONE and THIS ONE.. Another post that clarifies "residency"for tax purposes is THIS ONE.

Lastly, please note that we left in 2000, and we made overseas investments between 1998 and 2000. The rules may have changed a bit, but I believe the answers I gave above still stand.

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boeg

I previously posted in this in the "Application" section, but would like a few more responses given the undesirability of alerting the bank to one's plans to leave.

The Canadian High Commission website tells me that, since 1 February 2005, cash payments and postal orders in South African Rand are no longer accepted. Processing fees must be submitted by bank-issued cheque or bank draft only, in the correct Rand amount, payable to "The Canadian High Commission".

Bank drafts or bank-issued cheques in Canadian dollars, payable to "The Receiver General for Canada", are also acceptable, as is Canadian dollar cash. No personal cheques, corporate cheques, credit cards or other forms of payment will be accepted.

Zordack (spl?) tried to reassure me that when the bank is necessarily informed of the beneficiary, I should say that I am applying for perm res in the short term, and intend to return. If all goes as hoped, this may well be true. But will bank minions draw any distinction between me and those who are officially emigrating, or will they just freeze my account as a precaution?

Ps: I am not registered for tax as this is my first year of working (for myself).

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Marius O

If the teller asks, and that's a BIG if, you can say that you're applying for a few visitor's visas. I'm sure they wouldn't even lift an eyebrow.

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johankok

Transactions over a certain value is autmatically fed to the reserve bank as an alert. I am not sure what the current values is, and nor what the internal (inside the country is). For international transactions it is somewhere between 20K and 30K. I would presume that that would be significanlty higher for local transactions.

Anything below that is highly unlikely to be reported. Most of the current reports happens automatically, and the banks would be requested to provide additional information, but again they do not tract small amounts, even if it would be for the High Commission.

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Seanhay

Boeg, don't be overly concerned with bank teller or officials grilling you on what and why you're paying the Canadian High Commission. It's none of their business whatsoever. You're not making an international (forex) payment if you make the draft payable in Rands (which I'd suggest) and no-one has the authority to ask you why you're paying your money to anyone. If the amounts are excessive and they suspect money laundering, sure, there's justification, but you're under the radar, don't stress.

Bottom line / Consensus generally is that you're never emigrating though, and I see no reason why one should ever want to officially emigrate? It's your right to live and work where you wish, for as long as you wish, as long as you're following the correct process and adhering to the laws of the countries you're entering or departing.. :)

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gajo

Hi Harry,

Thanks for the advice. I need your advice (again). In previous discussions, you point out that it is ok to go the bank and ask the teller for a tax clearance for overseas investment purposes, but it is a big no-no to ask the bank for a tax clearance because one is emigrating. Now, if I do the former, what I want to know is:

1. Does the bank get the tax clearance on my behalf?

2. Will it be possible to get an original of this document?

3. How long does it take to obtain this tax clearance???

4. How long is the tax clearance valid for???

5. Once I get the tax clearance, will it then be ok to ask the bank to write out a bank-guaranteed cheque in my name?

6. Will this cheque be valid for deposit once I land in Canada??

Thanks in advance. Looking forward to hearing from you. <_<

Kind regards.

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Harry

Gajo,

I'm not an expert in these matters, and it's been five years since I last transacted stuff in SA, so some other folks here should correct where I go wrong if they have better or more recent info:

1. Yes they do

2. I've never seen an original. I left it with the bank.

3. My experience was "a few weeks."

4. I believe it is good up to the end of the tax cycle, but I cannot swear to that

5. When the clearance is in their hands, the bank will do whatever you would normally ask them. DO remember that you cannot ask them to invest more than R750,000 for you overseas! Giving you a bank guaranteed cheque is one of the things that should not be a problem. However, see below.

6. Gajo, I would not try to handle my money this way at all.

You have three mechanisms available to you:

a. Your travel allowance:

Some of this will be on your credit card and some of which will be traveller's cheques. Some banks, like Bank of Montreal, will open non-resident bank accounts and they will accept traveller's cheques as deposit in those accounts. However, I believe the SA Reserve Bank still prohibits SA residents ( which is what you will still be, I believe) from owning overseas "current accounts" ( cheque accounts). Remember that every person is allowed a travel allowance ( kids get smaller amounts), not just taxpayers.

b. Your R750,000 overseas investment per resident SA taxpayer ever:

You can go to a bank in SA. Some of them have branches in England. Most have overseas investments availble for just this R750k-purpose. They can invest your $750,000 in short term investments in Britain or even elsewhere. I am not aware of them having any Canadian connections. Remember that this is your money to invest as YOU see fit overseas. As far as I know, you can move it around where you please...it is yours. The bank in England will take your investment instructions. DO remember, though, that you have in effect informed the SA Reserve Bank in this process that you have invested overseas as an SA resident who is temporarily outside the country. It may be worth your while visiting the branch in England. I would not open a curent account with them.( see point a)

c. Gifts to non-SA-residents

Any SA citizen taxpayer "resident in SA" may make a donation to or give a gift to a "foreign" person overseas of R30,000 per year. You may not give yourself that gift! <_<

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gajo
However, I believe the SA Reserve Bank still prohibits SA residents ( which is what you will still be, I believe) from owning overseas "current accounts" ( cheque accounts).  Remember that every person is allowed a travel allowance ( kids get smaller amounts), not just taxpayers.

<{POST_SNAPBACK}>

Hi Harry,

Thanks for the advice!!!!!!! :D If I will become a permanent resident in Canada, what will be the next best thing to a current account if I can't open one of these because SARB prohibits it???? Please advise. Thanks in advance B)

Cheers.

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gajo

Dear All,

I am planning to apply for an investment clearance from the bank. If I apply for one now, will it remain valid until I leave next year??? Please advise, someone. Thanks in advance.

Kind regards.

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