Question:
I moved without formally emigrating and have been living in Ireland for eight years now. When I left I cashed in my provident fund money and paid all my taxes due. I still have a property which is on the market for R550 000.

I have a bank account in South Africa and once my property is sold what taxes would I have to pay and can I bring my money over to Ireland as I won't be moving back?

Answer:
Finalising the sale of the remaining South African property and somehow moving the capital to Ireland seems to be the final step in your relocation to Ireland. I assume that you earn all your income there and no further income is earned in South Africa.

The sale of a capital asset could potentially lead to a taxable capital gain arising with subsequent capital gains tax (CGT) implications. To determine the extent of a capital gain, you need to ascertain the difference between the proceeds (in this case the amount you sell the house for) and the base cost (usually the purchase price and related acquisition cost plus any subsequent capital improvements). So we are essentially talking about the profit on the sale of the property.

If you are living permanently in Ireland, you will be considered a non-resident for South African income tax purposes. In terms of the South African Income Tax Act, however, non-residents are liable for the payment of CGT on the sale of fixed property in SA.

As a basic guideline to calculate a potential CGT liability, you need to consider the likely proceeds and subtract the acquisition costs and any capital improvement costs to arrive at a capital gain. From the gain you are able to subtract an annual exclusion amount of R15 000 (2008/2009 tax year) to arrive at a net gain for the tax year. If a residence is a primary residence, an additional exclusion is available. Unfortunately, this is not available to you as the property you mention is clearly not your primary residence. Your net gain will be subject to effective capital gains tax of no more than 10 percent (depending on the amount of the gain).

I am cautious to give you a definitive answer on the aspect of remitting the money offshore. Where a person has factually emigrated the situation is very clear: upon emigration a person is allowed to take defined amounts abroad with the balance remaining in a blocked Rand account in South Africa. Even the funds in the blocked Rand account may be taken offshore subject to a 10 percent charge being paid.

Your case is slightly more difficult since you have been living in Ireland for a long period of time without having formally emigrated. No money may be remitted offshore without approval from the SA Reserve Bank. I therefore advise you to consult an exchange control specialist who will be able to act on your behalf in dealing with SARS, the SA Reserve Bank and to also facilitate the easiest and most practical method for you to transfer the net proceeds of the sale to you in Ireland. Most South African commercial banks have an exchange control department that you could contact.

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