South Africa’s new retirement system is leaving tax experts with serious questions.
Major questions remain over South Africa’s new two-pot retirement system, with tax experts still unsure how the changes will affect South African expats.Lambert Roberts and Martin Bezuidenhout from Tax Consulting SA, there is still widespread confusion amongst South Africans on how they can access their South African retirement funds overseas and if they’ll be taxed.
In the past, South Africans could withdraw their retirement savings immediately after confirming their immigration status with the South African Reserve Bank and the South African Revenue Service . “This Notice confirms the individual’s date of tax residency cessation and is considered to be crucial evidence required to process the withdrawal by the relevant policyholder. Without this Notice, these retirement funds will often remain locked in South Africa.”The new two-pot retirement system, which will take effect on 1 March 2024, could also create further challenges for expats trying to take out their retirement funds from South Africa.
A third vested pot will hold all retirement savings prior to the commencement of the new system next year and will abide by the current pension rules.However, the impact of this system for expatriates and the associated tax implications largely remain unclear at this stageThe new system has been met with opposition, with many fund managers stating that they need more time to ensure that they can effectively implement the new retirement system.
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