Helping South African expats and Australian families navigate financial complexity. I provide practical advice to help you build the life you really want.
Tax residency, retirement funds, and moving money offshore
Last week I hit a personal milestone: just over three years since landing in Melbourne and making Australia my home.
It prompted me to go back and re-read some of the cross-border rules around tax residency, retirement funds, and moving money offshore. Even as a financial adviser who deals with this more than most, it remains a highly specialised area.
In practice, I generally work alongside tax specialists and lawyers, and often refer clients directly to them, particularly where SARS is involved. The rules matter, but so does the administrative reality. I am currently in a stretched-out back and forth with SARS regarding my own Australian income reporting. Proving to an administrative body that you are protected by a treaty is a slow, manual process.
As I worked back through the changes and clarifications of the last few years, there were a few points that stood out. I’ve summarised them here.
1. One of the biggest shifts: from financial emigration to tax residency
This change happened a few years back, but it remains one of the most significant shifts in the system: South Africa no longer focuses on “financial emigration” through the Reserve Bank. Instead, everything now flows through tax residency with SARS.
What matters is whether SARS agrees that you have ceased South African tax residency. Until that happens, South Africa can still tax you on worldwide income. A common assumption is that living overseas, or holding a foreign passport, automatically breaks tax residency. It does not.
SARS’s own explanation of how tax residency works, including the tests they apply, is worth reading. You can find it here: SARS: Cease to be an SA tax resident
2. A quiet but important change on citizenship
Another change that is worth noting is around South African citizenship. A Constitutional Court ruling confirmed that South Africans do not automatically lose their citizenship when acquiring another nationality.
In practical terms:
- You do not need a “retention letter” to remain South African.
- Your citizenship status should show as active on the National Population Register.
2026 Update: In November 2025, Home Affairs launched the Citizenship Reinstatement Portal. It allows you to verify your status using biometrics and confirm your records without visiting a consulate. It is worth checking your status here: My Home Affairs Online
3. Why tax residency now sits at the centre of everything
You remain a South African tax resident until you formally break residency under one of two tests.
How SARS looks at “ordinary residence” This test is about intention. SARS asks a simple question: where is your real home? If you keep strong ties to South Africa, such as a primary residence, spouse, or dependants, SARS may argue that you remain resident.
The physical presence fallback (the 330-day rule) If you are no longer ordinarily resident, SARS can still consider you a resident based on past physical presence. In that case, if you stay out of South Africa for 330 consecutive full days, you are deemed to have ceased residency from the date you left. Note that this change is not automatic. You must formally notify SARS.
4. Retirement funds: where expectations often need resetting
This is often the area where expectations and reality drift apart.
The Two-Pot Reality (2026) The implementation of the Two-Pot system means your fund is likely split into a Vested Pot, a Savings Pot, and a Retirement Pot.
- The Savings Pot: This can often be accessed once per tax year without waiting for the three-year rule, though it is taxed at your marginal rate.
- The Three-Year Rule: For your Vested and Retirement pots, you generally cannot access them until you have been a tax non-resident for three consecutive years.
What typically happens when funds are accessed Withdrawal tax is calculated using a separate table, not your normal income tax rates. It is better understood as deferred tax. There was no tax when the money went in, and no tax while it grew. The tax at withdrawal is simply the bill coming due. SARS publishes the tax tables here: SARS: Retirement withdrawal tax tables
5. Moving money offshore: more friction than many expect
Another area that has quietly tightened over time is the movement of money out of South Africa. Banks are now far stricter in enforcing SARS requirements.
Under Exchange Control Circular 15/2025, rental income and dividends are often blocked until an Approved International Transfer (AIT) PIN is provided by SARS. Interest income may flow more easily, but this depends on the bank.
A quick note on outstanding bank debt Having an outstanding credit card balance or personal loan does not stop you from ceasing tax residency or accessing retirement funds once the rules are met. These debts can be settled later using released funds.
Final thought
Cross-border rules rarely change overnight. They tend to evolve quietly through administrative shifts. If there is one takeaway from my own current experience with SARS, it is that what happens in practice is not always a reflection of what the regulations say.
Whether you handle this yourself or work with a specialist, a quick sense-check now is usually far easier than trying to unwind an administrative knot later.
Sources and further reading
The following sources provide additional detail and primary reference material for the topics covered above:
- SARS – Cease to be an SA tax resident and reinstatement of tax residency Link to SARS
- SARS – Retirement lump sum and withdrawal tax tables Link to SARS
- SARS – Tax Compliance Status and international transfers Link to SARS
- Department of Home Affairs – Citizenship Reinstatement Portal (2025) Link to Portal
- SARB – Exchange Control Circular 15/2025 Link to Circular
- South Africa–Australia Double Tax Agreement (Synthesised text) Link to Treaty