Finansiële Emigrasie: Testamente en intestaat vererwing met emigrasie

Wanneer jy na Australië verhuis sal jy vind dat alles is dieselfde, net heeltemal anders . . . Ons weet almal hoe verskillend Engels geinterpreteer kan word: “traffic light” in plaas van “robot”, ‘n “bakkie” word ‘n “ute” genoem, ens. Boedelbeplanning is nie ‘n uitsondering nie, en soos die ou gesegde lui :”die enigste ding waarvan jy seker kan wees is die dood en belasting”. Jou testament is die beste manier om te verseker dat jou wense uitgevoer sal word in die geval van dood. ‘n Bestaande Suid-Afrikaanse testament sal heel waarskynlik nie geldig wees in Australië vir die afhandeling van jou boedel nie.

Indien ‘n persoon bates in Australië  besit en sonder ‘n geldige testament tot sterwe kom, sal sy boedel as intestaat beskou word. Die afgestorwe persoon se bates sal dan streng volgens statutêre reëls hanteer word; in sommige gevalle, in die afwesigheid van naasbestaandes, kan dit ‘n onbeplande en onbedoelde geskenk aan die Staat tot gevolg hê.  In die lig van die intestaat opvolgings reëls, sal die Staat ‘n administrateur aanstel om die bestorwe boedel te administreer en af te handel.  Die resultaat kan natuurlik dan wees dat die persoon wat in daardie rol aangestel is, die bates verdeel sonder dat dit 
noodwendig ooreenstem met die wense van
die afgestorwene.

Intestate afsterwe se praktiese uitvoering beteken dat, indien die afgestorwe persoon ‘n gade en kinders sou nalaat, die gade geregtig is op die eerste $100 000 uit die boedel, terwyl die restant dan gelykop verdeel sal word, 50% aan die gade en 50% aan die kinders. In die geval van minderjarige kinders (jonger as 18 jaar), sal hulle gedeelte deur die Publieke Trustee gehou word totdat hulle die ouderdom van 18 jaar bereik.

‘n Eenvoudige oplossing om jou risiko te verminder om intestaat te sterf, is om jou eie testament op te stel of ‘n standaard testament te koop in die vorm van ‘n “will kit” – veral as dit eenvoudig is in terme van beide die bates sowel as die begunstigdes. Ons beveel egter ten sterkste aan dat jy gebruik sal maak van ‘n regspersoon in hierdie verband.

Dit is uiters belangrik om te verstaan dat mense se omstandighede en wense verskil en jy moet veral ekstra versigtig wees indien jy geemigreer het met minderjarige kinders.

‘n Volledige testament in Australië moet veral die volgende drie aspekte aanspreek:

• Maak jou wense duidelik met betrekking tot jou bates in die geval van jou dood,
• Die aanwysing van ‘n Voog – ‘n Persoon wat deur jou aangestel word om jou minderjarige kinders se sake te behartig. Jy kan enige spesifieke faktore wat jy graag wil hê hierdie voogde in gedagte moet hou in die opvoeding en grootmaak van jou kinders  in ‘n aparte Memorandum van Wense stipuleer.
• Jou lewende testament bemagtig ‘n persoon om namens jou te handel indien jy ongeskik daartoe verklaar sou word (gewoonlik onverwags en baie jare voor jou dood)

In die meeste gevalle sal slegs jou bates in Suid-Afrika onderworpe wees aan boedelbelasting, ongeag jou residensie status. Sodra jou belasting emigrasie geaktiveer is sal jou buitelandse bates vrygestel wees van boedelbelasting, d.i. jou bates bv in  Australië .
Alhoewel boedelbelasting in Australië nie van toepassing is nie, moet kapitaalwins belasting egter in ag geneem word in jou boedelbeplanning.

Dit is dus uiters noodsaaklik om jou belasbare Suid-Afrikaanse boedel te skei van jou nie-Suid-Afrikaanse boedel (vrygestel van boedelbelasting). ‘n Geldige Suid-Afrikaanse testament kan jou erfgename beskerm teen ‘n lang en omslagtige proses om die Meester van die Hooggeregshof (in Suid-Afrika) te oorreed om nie net ‘n gesertifiseerde afskrif van jou Australiaanse testament te aanvaar nie, maar ook jou Australiaanse eksekuteur.

Die Meester mag die Australiaans aangestelde eksekuteur aanvaar sonder om die normale prosedures te volg, op voorwaarde dat die afgestorwe persoon nie in Suid-Afrika woonagtig was nie en dat daar nie in sy/haar boedel Suid-Afrikaanse vaste eiendom ingesluit is nie. Die buitelandse eksekuteur is verantwoordelik (soos in alle gevalle) om ‘n finale belasting opgawe en boedelbelasting opgawe in te dien.

‘n Uittredings annuiteit in Suid-Afrika vorm nie gewoonlik deel van jou wense in jou testament nie. In sekere gevalle kan die trustees van die betrokke fonds besluit oor die begunstigdes en moontlik selfs  jou wense verontagsaam , veral indien jy getroud is en in die geval van minderjarige kinders. Soos in ‘n vorige uitgawe bespreek, beveel ons sterk aan dat alle eks Suid-Afrikaners navraag behoort te doen en uit te vind of hulle nog uittredings annuiteite in Suid-Afrika het. Vir verskeie redes mag dit tot jou voordeel wees om hierdie fondse te onttrek en oor te plaas na Australië .  Jy het nie nodig om  aftree ouderdom (55 jaar en ouer) te bereik nie, verder benodig jy ook nie permanente verblyfsreg of burgerskap in Australië  nie.

Jou testament (beide in Australië en/of Suid-Afrika) behoort gereeld hersien te word en op datum gebring word om jou veranderde omstandighede in ag te neem. Jou testament is seker die belangrikste regsdokument wat die gemiddelde persoon ooit kan teken.Sonder een sal die hof  - en nie jy nie – besluit wat gebeur met jou bates.  Hulle kan selfs besluit wat gebeur met jou kinders.

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Financial emigration: Wills and intestate succession when you emigrate

When you move to Australia everything is the same, just totally different . . . We all know how different English can be interpreted; traffic light instead of robot, “ute” instead of “bakkie”, etc.

Estate planning is no different situation, as the old saying goes, the only thing that you can be sure of, is death and taxes . . . Your will is the best way to ensure that your wishes will be carried out with regards to the distribution of your assets following your death. 

An existing will in South Africa may not be valid in Australia for the purpose of winding up a deceased estate. 

If a person own assets in Australia and dies without an Australian will, the deceased estate will be deemed to be intestate.The deceased’s property will then be dealt with in strict accordance with certain statutory rules; in some cases, in the absence of relatives may through inertia create an unplanned and unintended gift to the State government. In lieu of an intestate succession rules, the State appoints an administrator whom is tasked to wind up the deceased estate. It follows that the person who is appointed in that role and the actual distribution may thus not reflect the deceased’s true wishes.

Intestate succession practically means that if a deceased had a spouse and children, the spouse would be entitled to the first $100,000 from the estate and the remainder of the estate would be divided equally, 50% to the spouse and 50%to the children.In a case where the children are minors (under 18 years) their share would need to be kept by the Public Trustee until they reach the age of 18.

A simple solution to mitigate the risk of dying intestate is to draw up your own will or using a standard form purchased from a stationer found in a will kit – especially if the estate is simple in terms of both assets and beneficiaries.However, we strongly suggest that you use the services of a solicitor in this regard.

It is important to understand that people’s circumstances and wishes differ and special care should be taken if you have emigrated and you have minor children. 

In Australia a proper will consist of at least three elements/documents that need proper consideration: 

• Making your wishes clear with regards to your assets in the event of your death, 
• Appointment of a Guardian - A person appointed by you to care and manage the affairs of your minor children. You can outline any specific factors you wish your guardians to consider in raising your children in a separate Memorandum of wishes.
• Your living will/ enduring power of attorney - empowering someone to act on your behalf if you should become incapacitated (possibly unexpected and/or many years before actual death)

In most instances only South African based assets will be subject to estate duty in South Africa.  Those of us who are still “resident” in South Africa (i.e. not formally emigrated) will therefor be liable for estate duty on all assets, including foreign held assets. 

Although estate duties were mainly abolished in Australia, CGT in Australia must be taken in consideration when you do your estate planning.

Preparing a South African will could go a far way to separate your dutiable South African estate from your non-South African estate (exempt from South African estate duty). Having a South African will could protect your legatees against a long and cumbersome process to have the Master of the High Court (in South Africa) accepting not only the certified copy of the Australian will but also the acceptance of the Australian executor.

The Master may accept the Australian appointed executor without following the normal procedures, on condition the deceased did not reside in South Africa and the estate does not include immovable South African properties.  The foreign executor will (as in all cases) be called upon to file a final tax return and estate duty tax return. 

A retirement annuity in South Africa does not usually form part of the wishes in your will.The trustees of the fund can override your wishes, especially if you are married and in the case of minor children. As discussed in previous issues, I urge all ex South Africans to check if you have retirement annuities left in South Africa, as well as the values thereof.  It might be to your benefit to cash in these retirement annuities and transfer the money to Australia.  You don’t need to be at retirement age (55 or older), nor do you need permanent residence or citizenship in Australia.

Your will (both in Australia and/ or in South Africa) should be reviewed from time to time, and brought up to date if necessary, in order to reflect changed circumstances.Your will is perhaps the most important legal document the average person will ever sign. Without one, the courts – and not you – decide what happens to your assets. They can even decide what happen to your children.

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Tax-free transfer of residential properties from a company or trust in South Africa – the clock is ticking…..

Your tax accountant in your newly adopted country was horrified to learn about the house/ property owned by your South African trust? It gets even more complicated if the property is registered in a close corporation (CC)/ company which is owned by that trust.

Have you been stung by the not-so-friendly double tax agreements, which allow you to be taxed on the rental income in two countries but denies you any tax credit?

Historically, some individuals acquired their residence in a company, CC or trust, primarily to avoid transfer duty and ultimately, one day, estate duty. You now live in a new country where estate duty is much less of a concern and the current layered corporate structure in South Africa is now probably no longer worth retaining.

Worst is, from an international tax point of view, you probably regret having set up the South African trust structure which in the current property market globally, does not really allow you to sell off and unwind this now seemingly inappropriate structure.

With recent developments in South Africa and the introduction of new corporate rules, the former close corporation is now treated very much like a private company held by closely linked individuals. The question is, do you convert the CC, close the trust or just leave all as is?

A concession has been enacted by the South African Revenue Services that allows for the tax-free transfer of a residence from a company or trust into the hands of shareholders or beneficiaries of the company or trust who are natural persons. Where the concession applies, the transfer is free from CGT, dividend tax and transfer duty. The entity or entities (in a multi-tier structure) out of which the residence is transferred must however be revoked, de-registered or liquidated.

The main requirements for the application of the concession are that the residence must be:

• mainly used for domestic purposes during the period from 11 February 2009 to the date of disposal;
• by one or more natural persons  who are connected persons in relation to the company or trust  that owns the residence:
• in simple English: a shareholder holding of 20% or more of the shares in a company is a connected person in relation to the company;
• any member of a CC is a connected person in relation to a CC;
• any beneficiary of a trust is a connected person in relation to the trust; and
• where a CC is trust owned, a connected party to the trust is a connected party to the CC yet not always a connected party to all companies owned by the trust. To be connected to a company the trust beneficiary should effectively be a 20% indirect shareholder of the company, once the trust layer is ignored.
• the residence must be disposed of on or before 31 December 2012

South Africans living abroad should understand that they need to obtain advice from a tax specialist, an attorney or other registered advisor to understand not only the benefits, but also to ensure that they truly meet the requirements for the relief, prior to them incurring any professional fees. It is also advised that you properly understand both the South African tax implications and exchange control requirements as well as the relevant tax position in your newly adopted country.

In terms of South African tax law, the qualifying connected member/shareholder/beneficiary or transferee, effectively "takes over" the property at the original base cost of the residence. In this case it is either the 2001 valuation price, or the time apportioned base cost plus the cost of improvements and the associate cost of disposal, be it a fresh valuation or cost to sub-divide.

There are many pitfalls that one should however consider, such as donations tax, the fact that you are a tax non-resident and CGT withholding taxes may apply to property held in your personal name.

The lawyers’ fees or conveyance and mortgage cancellation and registration fees remains due and payable at the current market value. The existing mortgage bond may be passed on, yet it is important that approval of the bond in the name of the new owner’s name be approved prior to 31 December 2012 as the transaction or agreement needs to final and binding by 31 December 2012.

What do you do should you be interested to explore this opportunity? Contact us at www.cashkows.com or send us an email to taxinfo@cashkows.com.

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