Taxes in South Africa
The South African tax year begins on 1 March, and you will be deemed a temporary resident of South Africa for tax purposes once you spend 183 days in the country in one tax year. You will then be liable for tax on any income generated in South Africa.
An expatriate becomes a full resident for tax purposes after five years, when you are liable to pay tax on your worldwide income, not just South African income. That is, if you were in South Africa
- 91 days or more in aggregate during the year of assessment, and
- 915 days or more in total during the preceding five years of assessment, and
- 91 days more in aggregate in each of the preceding five years.
Remember that even non-South African residents are taxed on their South African income. South African residents are taxed on their worldwide income, but there are double taxation agreements with the UK and other governments, so for instance if you pay tax on a rental property in London you won't pay tax on this in South Africa as well as to HMRC.
It may well pay for you to ensure you do not become a tax resident in South Africa, and if this is unavoidable expats should make sure they are aware of when they become resident so they can plan accordingly. Potential expats are strongly advised to take tax advice from an accountant before moving to South Africa.
Once you become a full tax resident of South Africa, you are likely to remain domiciled in the UK (or other home country) and inheritance tax would therefore still be paid there in the event of your death.
Foreigners need to declare their worldwide assets, and they must not make these available to residents while they are staying in the country.
Income tax rates in South Africa range from 18 percent to 40 percent. Capital gains tax is 10 percent, and will need to be paid on sale of a South African property should a gain have been made.