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In June 2021 the South African Revenue Service (SARS) published details regarding standard and specific documentation required to evidence that a taxpayer has ceased South African tax residence.

An individual is a resident for tax purposes either by way of ordinarily resident or by way of physical presence. The SARS have a number of factors that will be taken into account to determine whether a taxpayer has ceased to be a tax resident.

Once an individual breaks their tax residence with the Republic a deemed disposal for capital gains tax purposes takes place. Going forward the individual would only be taxable on South African source income.

The SARS mention on their website that you must declare a change to tax residency status to the SARS. Failure to do so could result in consequential tax implications.

The ‘declaration of ceasing to be a tax resident’ may be declined if one of the following conditions apply:

  • If the taxpayer does not meet the criteria for ceasing to be a tax resident, or
  • If the taxpayer cannot provide SARS with the relevant materials of the correct relevant materials as requested.

The South African tax year for natural persons from 1 March to 28/29 February, and so the changes will be applicable in respect of returns filed for the year ending 28 February 2021.

Full details are available on the SARS website – https://www.sars.gov.za/