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Moving from South Africa Tax Guide 2026: SARS Tax Emigration, RA Lock-Up & Exchange Control

Quick Answer: South Africa has a formal 'tax emigration' process through SARS (South African Revenue Service) — ceasing SA tax residency triggers a deemed disposal of worldwide assets at fair market value (similar to Canada's departure rules). The 3-year retirement annuity lock-up means you cannot access your South African RA funds until 3 years after SARS confirms your non-residency. South Africa's exchange control regime (SARB) has specific rules about transferring capital abroad. The 2020 expat tax change (Section 10(1)(o)(ii)) removed the blanket exemption on foreign employment income — SA tax residents working abroad now pay SA tax on income above R1.25M.
By Daniel, founder of CountryTaxCalc.com

Last Updated: April 2026

Key Facts

SARS Tax Emigration: Cessation of SA Tax Residency
South Africa taxes residents on worldwide income (residence-based taxation). Ceasing SA tax residency requires a formal process with SARS. Two tests determine SA tax residency: (1) Ordinarily resident test: if you regard South Africa as your permanent home ('where you naturally return when you wander'), you are SA tax resident regardless of time abroad. Ceasing ordinary residence: physically leave SA with the intention of not returning permanently; change your domicile to another country. (2) Physical presence test: you are SA tax resident if you are physically present in SA for ≥91 days in total during each of the current year and each of the preceding 5 years, AND ≥915 days in total during those 5 preceding years. Formal tax emigration: SARS requires you to complete the formal process via eFiling (sars.gov.za). File a Notification of Emigration, submit supporting documentation (proof of foreign domicile, lease/purchase of overseas property, foreign employment contract, etc.). SARS issues a letter confirming your non-residency date. Deemed disposal: on the date you cease SA tax residency, all your worldwide assets (except SA real property and SA business assets) are deemed disposed of at FMV. Capital gains tax applies at the inclusion rate of 40% (individuals) × marginal income tax rate (up to 45%) = effective max CGT rate of 18%. Annual exclusion: R40,000 (2025).
Retirement Annuity (RA) 3-Year Lock-Up on Tax Emigration
South African Retirement Annuities (RAs) are regulated under the Pension Funds Act. Historically: you could withdraw your RA balance on formal tax emigration. The 2021 amendment introduced a 3-year waiting period: from the date SARS confirms your tax emigration, you must wait 3 years before you can access (withdraw) your RA funds. This 3-year rule was effective from 1 March 2021. Before the 3-year rule: it was possible to emigrate and immediately withdraw RA funds (subject to the 'first R25,000 tax-free; balance taxed at sliding scale' rules). After 3 years: you can apply to withdraw the RA. Tax on withdrawal (once permitted): RA withdrawals are taxed at a sliding scale: first R550,000 (2025): 0%; R550,001–R770,000: 18%; R770,001–R1,155,000: 27%; above R1,155,000: 36%. Strategic consideration: given the 3-year lock-up, early RA withdrawals are not possible — plan accordingly. Some former residents who emigrated before March 2021 retained the right to access their RA sooner. Preservation funds and pension fund benefits: similar 3-year rules now apply. Living annuities: if you have already converted an RA to a living annuity, different rules apply — living annuity income can be remitted abroad.
Exchange Control: Moving Capital Out of South Africa
South Africa's South African Reserve Bank (SARB) controls the movement of capital out of South Africa. Exchange control rules affect how much you can transfer abroad and through what process. Allowances for tax emigrants: (1) Single discretionary allowance: all SA adults may transfer up to R1,000,000 per calendar year abroad without tax clearance (this is available to residents and non-residents). (2) Foreign investment allowance (for tax emigrants): on formal SARS tax emigration, you can apply for an additional foreign investment allowance — currently up to R10,000,000 per person per year with a SARS tax clearance certificate (Good Standing). Above R10M: application required to SARB. (3) Non-residents: once confirmed as non-resident by SARS, capital held in South Africa can be freely remitted abroad via an 'emigrant capital account' through an authorised dealer (South African bank). Practical process: open a South African bank emigrant account, transfer funds into it, then remit internationally via authorised dealer (FNB, Standard Bank, Absa, Nedbank, etc.). The tax clearance certificate (from SARS via eFiling) confirms no outstanding SA tax obligations and is required for large transfers. Pension fund proceeds, RA withdrawals, and investment proceeds can all be transferred via this process once applicable lock-up periods expire.
Section 10(1)(o)(ii): The 2020 SA Expat Tax Change
Prior to March 1, 2020, South African tax residents working abroad for ≥183 days per year (60+ consecutive days) were fully exempt from SA income tax on foreign employment income. This was the 'expat tax exemption.' From March 1, 2020: the exemption was limited. SA tax residents working abroad now pay SA income tax on foreign employment income exceeding R1,250,000 per year. Below R1.25M: still fully exempt. Above R1.25M: SA income tax applies to the excess, with a foreign tax credit for taxes paid in the country of employment. This primarily affects SA nationals on high-earning assignments in the UAE (where there is no income tax), Qatar, Saudi Arabia, and other Gulf states — where no foreign tax credit is available. For SA nationals who have completed formal tax emigration (confirmed non-residents): Section 10(1)(o)(ii) does not apply — they are not SA tax residents. The 2020 change only affects continuing SA tax residents who live and work abroad without completing formal tax emigration. Key message: SA nationals working in the UAE or Gulf without completing tax emigration may owe SA income tax on their foreign income above R1.25M.
Final SARS Return and Non-Resident SA Income Tax
Final SARS income tax return: file for the SA tax year in which you cease residency (SA tax year runs March 1 to February 28/29). Your final return covers March 1 to your cessation of residency date — worldwide income for that period. Include deemed disposal capital gains on the return. File via eFiling (sars.gov.za). SARS assessment: expect SARS to scrutinise the deemed disposal carefully. Engage a registered tax practitioner (RTP) for the final return if you have significant assets. After tax emigration as a non-resident: SARS taxes you only on SA-source income: (1) SA rental income: taxable in SA; (2) Dividends from SA companies: 20% Dividends Tax (withheld at source); (3) SA-source interest: 15% withholding tax for non-residents; (4) CGT on SA real property: if you sell a South African property as a non-resident, the buyer withholds 7.5% (individuals), 10% (companies), or 15% (trusts) of the gross proceeds as withholding tax — this is provisional and you file a non-resident return to confirm the final CGT. These withholding taxes are final taxes for most non-residents — under the applicable DTA (South Africa-USA, SA-UK, SA-Australia, etc.), the residence country may tax the income and provide a FTC for SA withholding.

South Africa has one of the most administratively complex departure processes of any mid-income country — the formal SARS tax emigration process, the Reserve Bank exchange control requirements, the 3-year retirement annuity lock-up, and the 2020 expat tax change all combine to create a system that requires careful advance planning. South Africa's departure rules are also relevant beyond South Africans themselves: the large South African diaspora in the UK, Australia, Canada, and UAE frequently needs to manage ongoing SARS obligations. This guide covers the key steps, timelines, and financial implications of the formal South African tax emigration process.

Moving from South Africa to the UK or Australia: Common Corridors

The UK and Australia are the two most common destinations for South African emigrants. Key cross-border points:

SA-to-UK: The UK-South Africa DTA governs. SA property gains: South Africa retains taxing rights. SA pension: 'ordinary contributions' (employee + employer contributions to SA pension) — SA may withhold on retirement; UK also taxes the income. Dual-status returns required in both countries for the year of departure. UK split year treatment claimed via SA109; SA formal tax emigration via eFiling. UK does not recognise SA RAs as pension funds — they may be treated as foreign financial assets for UK tax purposes.

SA-to-Australia: The Australia-South Africa DTA governs. Australian CGT Event I1 applies when you become Australian-resident (deemed acquisition at FMV). SA deemed disposal also occurs. Careful to avoid double taxation: if SA deems disposal and AUS deems acquisition at the same FMV, there is no net double CGT — the cost base for Australian purposes is reset to the departure-day FMV. SA RA as an Australian resident: treated as a foreign pension fund. Withdrawals are Australian-taxable; SA withholding credits via FTC.

FinSurv reporting: When making large transfers from South Africa, the Authorised Dealer (your bank) will complete FinSurv (Financial Surveillance) reports to SARB on your behalf — you do not do this directly, but ensure your bank has your tax emigration confirmation.

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Frequently Asked Questions

Q: What is the deemed disposal of assets when I formally emigrate from South Africa?

South Africa's deemed disposal rule is similar to Canada's: when you cease SA tax residency, SARS treats all your worldwide assets (other than SA real property and SA business assets) as if you sold them at FMV on the cessation date. Assets subject to deemed disposal: shares (JSE-listed and foreign), unit trusts, investment accounts, foreign property, cryptocurrency, intellectual property. SA real property: NOT subject to deemed disposal — remains in the SA CGT net and is taxed on actual sale (as non-resident, 7.5% withholding by buyer, final CGT on return). The gain on deemed disposal: (FMV on departure date) minus (base cost). Net gain after annual exclusion (R40,000) is included in taxable income at the 40% capital gains inclusion rate for individuals. At a 45% marginal income tax rate, the effective CGT rate is 45% × 40% = 18% on gains. For large unrealised portfolio gains, this can be significant. You do not need to actually sell the assets — the deemed disposal is a notional tax event. The assets physically remain wherever they are held. The tax is calculated and paid as part of your final SA income tax assessment.

Q: I'm a South African working in Dubai — do I still owe SA tax?

This is the core issue of the 2020 expat tax change. If you have NOT completed formal SARS tax emigration, you are still an SA tax resident — and the Section 10(1)(o)(ii) exemption only covers R1.25M of your Dubai salary. If you earn AED 500,000/year (approximately R2.25M), you pay: SA tax on R1,000,000 (the amount above R1.25M), at your SA marginal rate (up to 45%). Because Dubai has no income tax, there is no foreign tax credit to offset your SA liability. Net result: you owe SARS income tax on the excess Dubai salary above R1.25M — without formal emigration. Solution: complete formal SARS tax emigration (cease SA tax residency via the eFiling process). As a non-resident, Section 10(1)(o)(ii) does not apply — your Dubai salary is not SA-taxable. The deemed disposal on tax emigration applies, but for many South Africans in the Gulf, the annual tax saving on salary post-emigration outweighs the once-off emigration cost. Engage an SA registered tax practitioner to model both paths.

Q: How do I actually transfer my money out of South Africa after emigrating?

The process for transferring capital post-tax emigration: (1) Obtain SARS tax clearance certificate (Good Standing) via eFiling — this confirms no outstanding SA tax. Required for transfers above R1M. (2) Open an emigrant bank account (also called a blocked rand account or non-resident account) at an authorised dealer bank (FNB, Standard Bank, Absa, Nedbank, Investec). This is a ZAR-denominated account from which you can remit internationally. (3) Liquidate your SA investments and consolidate proceeds into the emigrant account. Authorised dealers report all FX transactions above certain thresholds to SARB (FinSurv reporting). (4) Initiate international transfers via the bank — up to R10M per year via the foreign investment allowance with tax clearance; above R10M requires SARB application. Practical timeline: the entire process (tax emigration confirmation, tax clearance, account setup, transfer) typically takes 3–6 months. Start early. The SA fintech firm 4Sight and advisors like Exchange4Free specialise in South African emigration financial transfers.

Q: What happens to my South African property when I leave as a tax emigrant?

South African real estate is NOT subject to deemed disposal on tax emigration — it remains in the South African CGT net even as a non-resident. Options: (1) Sell before emigrating: while still SA-resident, gains benefit from the full individual CGT calculation including the R2M primary residence exclusion (if it was your home). (2) Retain and rent out: as a non-resident landlord, rental income is SA-source income — SA withholds 25% (individuals) on gross rental payments, unless you elect for the net income option via SARS. File a non-resident return annually for rental income. (3) Sell as a non-resident: the buyer must withhold 7.5% of gross sale proceeds. You file a final non-resident capital gains return with SARS; any excess withholding is refunded. The primary residence exclusion (R2M gain exempt) is NOT available to non-residents for property that was your SA home — it is only available while you are SA-resident. Plan accordingly: selling your SA home before departure (while still resident) can save significant CGT via the primary residence exclusion.

Disclaimer: This guide provides general tax information for educational purposes only. SARS tax emigration procedures, RA lock-up rules, exchange control allowances, and SA income tax rates change with annual South African National Budgets. Nothing in this guide constitutes tax or legal advice. Consult a South African Registered Tax Practitioner (RTP) and a SARB-authorised dealer before completing formal tax emigration.

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