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Property Ownership if I am living in another country?

Posted 17 September 2012 under Tax Questions



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Great informative site!

A question for you please.

I live in the UK (and have done so for the pass 12 Yrs) but was born and bred in South Africa. I therefore have dual citizenship, having not renounced my SA .
I have recently been bequeathed property back in SA, which I plan to rent out for R5k/month.

Am I a tax resident now that I own an asset in the country and do I need to register as one now that I own property and do I need to start paying tax on the rental income ?

Thanks for your time

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TaxTimTaxTim says:
3 September 2012 at 15:46

Thanks very much for the encouraging words and we're glad you find the site useful!

Fortunately, you don't qualify as a tax resident of South Africa just because you have a property and plan on earning rental income:)

Unless you come back to SA for longer than 30 days of any year you will be considered non-resident for tax purposes and will only pay tax on the income earned from a South African source, which in this case will be the property rental. Ideally you would need to register as a taxpayer and only submit the income earned and related expenses and pay tax on the net amount.

In the UK, as a tax resident there you would need to disclose the rental income earned, but the tax you paid in South Africa would be offset so you will never be taxed twice on the same income.

Does this help?


Ev says:
3 September 2012 at 19:15

Thanks Tim

So to clarify, as i wont be back in SA for langer than 30 days, i will be considered a non resident and therefore will have to pay tax on the rental income?
In terms of rental income, as mentioned in my case there will be rental income (prior to offsetting any taxable allowables) of R60K/yr, does this fall under any taxable threshold ?

Thanks Again


TaxTimTaxTim says:
3 September 2012 at 20:18

Regardless of your tax residency status you will always have to pay tax on any income earned from a South African source so yes you will have to pay tax on the rental income. This amount does fall under the threshold of R63 556 per annum and there is no requirement to file a tax return if you earn less than R160 000 so there wouldn't be a need to file a return given this is your only income and it won't be taxable as it is below the threshold.

I hope that clears it all up:)


Ev says:
4 September 2012 at 14:21

Great, thanks Tim. Your help is much appreciated.
Regards


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