Emigrating or already living abroad? Why formally ceasing your SA tax residency matters

Whether you’re planning a move abroad or already living overseas, there’s one important step many South Africans overlook: formally addressing their South African tax residency.

Moving overseas doesn’t automatically mean you have ceased being a South African tax resident, and leaving your tax position unresolved can create complications later – particularly if you plan to access retirement savings or move assets and funds offshore.

Tax emigration, accessing a retirement annuity, selling a property, receiving an inheritance or transferring investments and savings offshore can each involve their own documentation and regulatory requirements.

Add multiple providers to the mix, and the process can quickly become difficult to coordinate.

A tax practitioner may handle the residency process and a fund administrator the retirement payout, and when it comes to moving the funds offshore, clients often default to their bank, where support can be limited and the real cost of the transfer can be obscured by hidden fees built into the exchange rate.

Recognising these challenges, multi-award-winning fintech Future Forex blends a comprehensive tax emigration and international money transfer solution into one seamless service, helping clients navigate the requirements of ceasing tax residency and moving their funds offshore, while reducing foreign exchange costs by up to 50%.

What does tax emigration actually involve?

Ultimately, your tax residency is determined by specific tests and circumstances, and leaving the country physically is not enough on its own.

The South African Revenue Service (Sars) generally applies two tests:

‘Ordinarily resident’, which considers whether South Africa remains the country you would naturally return to; and
‘Physical presence’, which looks at the number of days spent in South Africa over the relevant period.

“It’s quite common for people to assume that because they’ve been living overseas for several years, they’ve automatically ceased being South African tax residents,” says Harry Scherzer, CEO of Future Forex and a qualified actuary.

“But it’s something that needs to be properly addressed with Sars.”

Until tax residency is formally ceased, worldwide income and certain gains can remain within the South African tax net.

This can create the potential for overlapping tax obligations in South Africa and your country of residence.

For emigrants with retirement savings, there may also be an opportunity to access qualifying retirement annuities – though Sars requires an uninterrupted three-year period of confirmed non-residency, measured from the date residency is formally recorded, before a withdrawal directive will be approved.

Addressing tax residency early, rather than only once the funds are needed, avoids that clock starting later than it should.

An all-in-one tax migration and foreign exchange service

Future Forex assists with the full tax emigration process from the outset – starting with a formal Tax Residency Assessment, through the Sars notification of cessation of tax residency, to ongoing guidance throughout the three-year non-residency period.

Rather than having to coordinate between multiple service providers, you’ll also have a dedicated account manager – a specialist who understands your specific circumstances and guides you throughout the process.

Once your tax and retirement fund requirements are dealt with, the Future Forex team of experts will also assist with transferring your funds offshore – from retirement payouts and property proceeds to inheritances and investments – including any required Approval of International Transfer (AIT) applications, at no extra cost.

“Clients deal with one person who already knows their situation, rather than starting over with someone new once their funds are ready to move,” says Scherzer.

And when it comes to moving those funds abroad, Future Forex offers a far more streamlined and cost-effective alternative to traditional banks, which typically build a hidden 2-3% margin into the exchange rate on top of the visible transaction and SWIFT fees.

“By combining world-class technology with economies of scale, we can deliver savings of up to 50% compared with the banks. More importantly, our clients have complete visibility of their costs, with everything disclosed upfront,” says Scherzer.

Behind the scenes, Future Forex’s digital process handles much of the administration, from documentation through to the transfer itself, helping to turn what can be a complex, multi-step process into a more seamless experience.

This unique blend of intuitive technology and end-to-end support is why Future Forex earned ‘Company of the Year’ at the 2025 Africa Career Summit and ‘Outstanding Customer Service in Forex and Payments, South Africa’ at the World Business Outlook Awards.

If you’re unsure about your South African tax residency status, already living abroad or planning to emigrate, you can book a free consultation with a Future Forex tax emigration expert for guidance tailored to your circumstances.

Follow this link to get in touch with a Future Forex expert or request a quote for your transaction. You can also give them a call on 021 518 0558 or send them a message on WhatsApp.

Brought to you by Future Forex.

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