WHAT DOES THE TAXATION LAW AMENDMENT ACT (TLAA) MEAN FOR EXPATS’ RETIREMENT ANNUITIES?
What is the TLAA?
In the past, expats were able to withdraw their retirement funds after completing their financial emigration process.
The most recent changes to the Taxation Laws Amendment Act (TLAA) now make it compulsory for South African citizens to prove, according to SARS’ residency tests, that they have been a non-resident for three consecutive years, before they are allowed to withdraw retirement funds from South Africa, effective from 1 March 2021.
Prescribed Assets
Another concern regarding pension funds is the possibility of prescribed assets. Meaning that you will be required by law to allocate a fixed percentage of your pension fund in government infrastructure projects. As we have factually seen from South Africa’s recent history, the funds from these prescribed asset allocations will inevitably be used to further bail out state owned enterprises.
Now, a pension holder in South Africa is sitting with tightened Financial Emigration laws, a volatile rand and the possibility of having prescribed asset allocation. This leaves those who have already left South Africa with the need to review their current options for the retirement funds that they have left behind.
What can Caveat Capital Management do to help?
Prospective expats, more specifically those that have retired or are close to retirement should consider contributing funds in an offshore account in addition to their South African based pension fund. There is no tax advantage for offshore savings, such as with contributing to a pension fund in South Africa, however it would leave the expat with some accessible funds to aid them in their new country of residence.
There is hope! Caveat Capital Management can assist you if you have already emigrated and are waiting for your three years of non-residency in South Africa to pass by reviewing your retirement savings and financial situation as no retirement is a ‘one size fits all’ scenario. There are various options for prospective expats such as the establishment of an offshore retirement savings plan while still living in South Africa, or investment in an offshore discretionary trust account and withdraw the funds once relocation has been completed.
Given the uncertain times we find ourselves in, it is of the utmost importance to ensure a viable and cost-effective retirement strategy as soon as possible.
Who are we?
Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.
What we offer
Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the renumeration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.
Disclaimer
This report does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.
Contact Information
Main Office
Spaces A1, Kinetic Way Extension, Bridgeway, Century City Cape Town, 7441
Phone
Office: +27 (0)21 830 5777
General enquiries: info@caveat.co.za
Portfolio Management: FrancoisCaveat@protonmail.com
Website: www.caveat.co.za
Information and content
The information in and content of this publication are provided by Caveat Capital Management as general information about the company and its products and services. Caveat Capital Management does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.
Caveat Capital Management has taken and will continue to take care that all information provided, in so far as this is under its control, is true and correct. However, Caveat Capital Management shall not be responsible for and therefore disclaims any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon any information provided. Past performance is not an indication of future performance. Caveat Capital Management does not provide any guarantee regarding capital or performance.
Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).
