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Are UK pensions liable to South African income tax?

Posted 8 July 2013 under Tax Questions



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Are UK state pensions or UK company pensions, paid into the UK Bank account of a British national, who is resident as a retired person in South Africa, liable to South African income tax?

If I use your online digital tax assistant application will it correctly cope with such overseas pension income?

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TaxTimTaxTim says:
8 July 2013 at 21:16

What is the value of this pension annul? Is it taxed in the UK?


Suchin says:
9 July 2013 at 10:42

I have a UK state pension of 8,523.84 pa
a company pension of 626.28 pa
My Wife a state pension of 4,024.02 pa
My Wife a personal pension of 1,148.88 pa

The above are not taxed in the UK

By the way I just found an ITR12w guide on SARS website:
http://www.sars.gov.za/AllDocs/OpsDocs/Guides/IT-AE-36-G05%20-%20Comprehensive%20Guide%20to%20the%20ITR12%20Return%20for%20Individuals%20-%20External%20Guide.pdf

On page 7:

Foreign income received by (or accrued to) a resident individual is taxable. The following income types are, however, exempt from tax in terms of section 10(1)(o)(ii) of the Income Tax Act:

Any amount received or accrued under the social security system of another country
Any pension received or accrued from a source outside South Africa that is not deemed to be from a South African source.
Does this not mean our UK pensions are safe from SARS?

Kind regards


TaxTimTaxTim says:
9 July 2013 at 19:08

s10(1)(gC) deals with this exemption which makes foreign pensions for past services exempt from SA income tax. I asked about the amounts because the tax thresholds may have made it moot anyway. s10(1)(o)(ii) deals with foreign service income whilst out of the country for specific periods.


Suchin says:
10 July 2013 at 9:01

Many thanks. I think you have confirmed that in my case there will be no liability for SA tax on my state or personal pensions being paid in the UK. Can you confirm this and also that, if I use Tax Time it will allow me to classify that income as exempt from tax

Kind regards


TaxTimTaxTim says:
10 July 2013 at 11:51

Yes that is correct for both answers, TaxTim caters for all types of incomes and expenses regardless of whether they are exempt or not and will ask you huge right questions to lead you to complete the tax return correctly.


Suchin says:
10 July 2013 at 14:43

Many thanks


TaxTimTaxTim says:
11 July 2013 at 12:17

Only a pleasure, please let us know if we can help in any other way!


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