From March 1, 2021 South African expatriates will have full access to their South African based pension funds.
A major change in pension fund access rules opens a world of opportunities for South African expatriates. The Taxation Laws Amendment Act 23 of 2020 (TLAA 2020), which comes into effect on March 1, will allow South Africans that have been non-resident for three years to cash out any retirement funds held in South Africa. Retirement annuities, pension preservation and provident preservation funds are all covered by the new regulations.
Under the previous regime, South Africans had to be over 55 to access their pension savings from abroad, but that requirement has been swept away. The new qualification rules are, that expats qualify if they have ceased to be a South African tax resident and have remained a non-resident for three consecutive years or longer on or after March 1 2021.
The announcement comes as concerns mount in South Africa that the government is increasingly looking at using the nation’s pension funds for major infrastructure projects. In addition to concerns about the level of returns on the investment, there are worries over misuse and corruption.
South African overseas withdrawing their pension funds can reinvest their savings in tax-efficient international investment vehicles in stable currencies like the US dollar, sterling or the Euro. Moving their money out of South Africa relieves concerns over the government’s pension grab and provide significant opportunities to grow their wealth.
If you are a South African expatriate and would like bespoke advice on your pension funds, please get in touch with Michele directly on +971 50 618 6463 or email [email protected].
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