Exceptions to obtaining a TCS pin in relation to an emigration tax clearance.

The below is applicable to all persons who were at one point tax resident in South Africa or exchange control residents who did not formalise their emigration prior to 1 March 2021.  If you were at no stage a SA resident for tax or exchange control purposes this process of obtaining a TCS pin from SARS will not apply to you.

Where you wish to transfer remaining capital offshore and you ceased to be a tax resident prior to 1 March 2021 but you did not formalise your financial emigration with the South African Reserve Bank (“SARB”), you will also need to follow the above process.

The above process will require an active income tax reference number as this process is done using SARS e-filing.  Where no financial emigration took place before 1 March 2021, in many instances, you would need to reactivate a tax number with SARS before being able to proceed with the above application.

The exception to the above has now been addressed by SARS:

Where you are no longer on register with SARS, you are exempted from going through the motions to reactivate or register with SARS as a taxpayer in order to submit a TCR01 application to SARS in the following circumstances:

Where you are non-resident for tax purposes and become entitled to

• an inheritance or life insurance policy (Excluding lump sum benefits from pension preservation, provident preservation, retirement annuity funds and annuities from insurers) above R 10 million; or
• a distribution from a SA trust as a beneficiary (irrespective of the amount)

you are now required to obtain a “Manual letter of Compliance” from SARS to transfer any funds received.

To obtain such a compliance certificate, instructions need to be submitted to a designated email address at SARS with the relevant supporting documentation required with reference to your emigration that would have been supplied to SARS, should you still have held an active tax number.

Where you become entitled to an inheritance from a South African estate that is less than R10 million, the bank will not require a Manual Certificate of compliance from SARS, but they will require confirmation that that person has been recorded as a non-resident for tax purposes with SARS – if no formal financial emigration was submitted to the SARB prior to 1 March 2021. This would currently therefore require that person to reactivate, or register with SARS as a taxpayer, in order to submit a TCR01 tax clearance for purposes of emigration to SARS.  At this stage it is unclear as to whether the bank will accept confirmation that a person has submitted a declaration to SARS that he/she’s ceasing to be tax resident, but this may change.

02/07/2021