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Deemed disposal of assets after being away from SA for work?

Posted 14 March 2014 under Tax Questions



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I have been given the advice that I would automatically be considered a non-resident if I spend more than 183 days and more than 60 consecutive days outside of South Africa by SARS and would therefore have my tax status changed to non-resident. SARS would then deem my assets as sold (even though I have not actually disposed of them) and I would be liable to pay CGT.

Is this the case?

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TaxTimTaxTim says:
15 March 2014 at 16:30

Do you plan on formally emigrating out of South Africa?

the 183 days and 60 consecutive rule makes income earned during at period, when you are out of SA, exempt and not subject to tax, it does not automatically make you a non-resident.

What are your exact plans?


Taxi says:
17 March 2014 at 11:56

No, I am not planning on formally emigrating.

I am still employed by a South African company that has assigned me to setup an office in Germany. In order to do so I will be spending more than 183 days per year in Germany and would like to be able to spend more than 60 consecutive days outside of South Africa if necessary. I regularly fly back to South Africa for work (every 6 - 8 weeks, for a stay of 10 -14 days).

My South African employer is still withholding PAYE as usual.

My concern is that SARS would consider me a non-resident and deem my assets to be sold even though I have not sold them and therefore I would be liable for CGT on the assets.


TaxTimTaxTim says:
17 March 2014 at 15:21

You will not be deemed to be a non-resident. Your tax status remains as a resident, but you qualify for exemption of your income under section 10(1)(o)(ii) which means that under contract of employment if you spend the qualifying number of days outside of SA then the income you earn during that period is not subject to tax. Your employer should not be withholding PAYE during this period.


Taxi says:
18 March 2014 at 13:03

Thanks!


TaxTimTaxTim says:
19 March 2014 at 12:12

Only a pleasure!


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