YOUR MONEY: Tax and emigration — what should you expect to pay?

Question:

If I emigrate, what tax do I have to pay, and how do I minimise my tax bill?

— Name withheld 

Answer:

The tax on emigration is completely dependent on your personal assets and liabilities, excluding immovable property, personal-use assets, cash, insurances and retirement funds (your pension or provident fund, or retirement annuity). Exclusions are basically anything that do not carry a tax. So, if immovable property is an exclusion from exit tax, it means that you don’t have to pay capital gains tax on your South African property when you emigrate.

The exit tax is a deemed sale of all your assets the day before you emigrate (at market value). This means the only realistic way to reduce the exit tax is to emigrate during a downturn.

The good news is that due to all the exclusions that are allowed, the tax on emigration is not very common, as most people have only a few assets in their name.

— André Bothma, taxmaverick.co.za 

Next week’s question:

The bond on my house has increased by R10,000 a month over the past year, making it unsustainable for me on my current income. I’m also paying off an apartment, which I let, but I have to pay levies and rates on it. Should I sell the flat to help cover my home loan? Or how should I pay my monthly house bond?

— Solange

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