Planning for the transfer of South African assets on death after emigration

The prospect of uprooting your family and emigrating to another country probably ranks as one of the most difficult and stressful decisions any person will face during their lifetime. There are so many aspects to consider and planning to be done. Generally, the emphasis is on the emigration process itself and adjusting planning and structuring to best suit the requirements and challenges presented by the new country soon to be called home.

Many South Africans who have emigrated or are contemplating emigration may still end up owning assets situated in South Africa. This may vary from the family’s holiday home that has been retained for family holidays or other property investments that may not be liquidated immediately due to unfavourable market conditions and may further extend to business interests, other investments and even movable assets like motor vehicles.

Although a resident whose emigration has been completed and formalised is no longer a tax resident in South Africa, people often forget that South African assets owned by a foreign national or non-resident constitute a South African estate that must be dealt with on death. Should a foreign national or non-resident own assets situated in South Africa on his or her date of death, the estate will have to be registered with the Master of the High Court (“Master”) and an executor appointed to administer the South African estate.

It is therefore important to consider drafting a last will and testament that complies with all the South African legal requirements for a valid will to deal with your South African assets on death.

Most South Africans owning offshore assets are aware that in many offshore jurisdictions, an administrator in that country has to be appointed to deal with the transfer of the assets situated in that country from the deceased to the beneficiaries. This process is commonly referred to as “probate.” In the same way, a South African administrator must be appointed to deal with South African-based assets owned by a deceased foreign national. In South Africa, this will be done by way of reporting the estate to the Master and the appointment of an executor as mentioned above.

Naturally, the emigrant will also have a will dealing with his assets situated in the country he or she is emigrating to and possibly another will be dealing with assets situated in other parts of the world. Careful consideration is required to ensure the planning and drafting of the various wills are adequate to cover assets based in all jurisdictions without one contradicting the other. Expert advice should also be sought on the requirements for a valid will in each of the relevant jurisdictions.

Another aspect to consider is that a foreign national may be liable for estate duty on assets situated in South Africa. Similarly, to other jurisdictions that may levy death duties or what is commonly referred to as a “situs tax” on assets situated in that country, estate duty may also be levied by SARS on South African-based assets that form part of a non-resident’s deceased estate. One should also keep in mind that any capital gain realised from the disposal of immovable property in South Africa by a non-resident will be subject to income tax on capital gains in South Africa.

It is therefore important to be aware of and plan for assets situated in South Africa after emigration and ensure that this forms part of your overall integrated estate planning. Should you be considering emigration or already have emigrated but with South African assets, it may be worthwhile to chat with our estate planning team to help with the correct planning and integration of your South African estate into your global estate plan.

Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken based on this content without further written confirmation by the author(s).

August 28, 2023
Shining success in pivotal IT sector merger

Shining success in pivotal IT sector merger

In a landmark transaction that promises to redefine the landscape of South Africa’s information technology and telecommunications sector, the M&A Team of PH Attorneys played a crucial role in facilitating the acquisition of a leading cyber security software firm by a multinational enterprise software procurement company. This deal not only marks a significant milestone for both firms involved but also holds implications for the broader African market.

Leave to Appeal vs Special Leave to Appeal

Leave to Appeal vs Special Leave to Appeal

On 4 April 2024 in the matter of Savannah Country Estate Homeowners Association v Zero Plus Trading 194 (Pty) Ltd and Others (773/2022) [2024] ZASCA 40, our Supreme Court of Appeal (“SCA”) had to address the important difference between an application for leave to appeal and an application for special leave to appeal. In this article, we analyse the SCA’s views in this regard.

Sign up to our newsletter

Pin It on Pinterest