When a South African has money offshore, a primary benefit is often the hard currency that is held, and that they financially derisk themselves against the valuation of the rand. Moneyweb Tax
The past week was a good one for the South African Revenue Service , but not for promoters of certain offshore financial products. Sars issued a very clear ruling that it will strictly apply the law, sending a clear statement that taxpayers should not fall for fanciful tax benefits promised by certain promoters. When a South African has money offshore, a primary benefit is often the hard currency that is held, and that they financially derisk themselves against the valuation of the rand.
However, this Sars team is not lightweight and the ruling in question is a case study in how well National Treasury and Sars have legislated against schemes. A total of 15 different sections of tax law had to be considered as part of the ruling. Kissing a frog does not make it a prince Sars made short work on the naming of the scheme as a “pension” and the arguments that it provided similar benefits as a South African approved pension fund, provident fund or retirement annuity fund.