Living in South Africa
Your Complete Financial Guide
Essential guidance for UK expats navigating taxes, pensions, and financial planning in South Africa.
At SJB Global, we specialise in helping expats organise their financial lives and navigate the complexities of cross-border rules between South Africa and the UK.
Taxation in South Africa for Expats
South Africa’s tax system, managed by the South African Revenue Service (SARS), shares similarities with the UK but includes several key differences. Understanding how residency, pensions, investments, and estate planning are treated is crucial for British expatriates living here.
Tax rules are updated annually, so regular reviews are essential. This page is a guide only; professional advice is strongly recommended.
Quick Guide: Key Tax & Financial Insights
Get an at-a-glance overview of the most important topics for expats in South Africa, from residency rules and income tax to pensions and compliance.
Residency Rules
Understand how you could be classed as an ordinary or physical presence resident for tax purposes.
Income & Investments
Learn how South Africa taxes worldwide income, capital gains, investment returns, and rental income.
Pensions & Planning
Explore how UK pensions are taxed, the DTA rules, and whether a SIPP transfer is right for you.
Compliance
Stay on top of filing obligations, rebates, thresholds, and provisional tax requirements.
Defining a South African Resident
A person’s tax residency in South Africa can be classified as either an ordinary resident or a physically present resident, depending on their connection to the country.
- Ordinary Resident – Determined by the country a person would normally return to and consider home. This typically applies to South Africans, but may also include British expats.
- Physical Present Resident – If not considered an ordinary resident, an individual may still be deemed a resident for tax purposes through the physical presence test. This considers whether the person has spent a significant amount of time living in South Africa over a continuous period.
Being aware of your residency status is important, as it determines how your worldwide income and financial affairs are taxed in South Africa.
South African Tax Position for Residents
South African residents are taxed on their worldwide income. The system works similarly to the UK, with employers withholding tax from wages via PAYE. Residents are generally required to file an annual tax return.
Key points to consider:
Income tax bands are updated regularly; consulting current information is essential.
Significant income outside of employment may require provisional tax payments during the year.
Non-residents are only taxed on South African–sourced income, including immovable property and business assets located in the country.
Non-residents pay the same income tax rates as residents and must file a tax return if their South African–sourced income exceeds the filing threshold.
Key Tax & Financial Topics for Expats
In addition to income tax and pensions, there are several other taxes that expats should understand to plan effectively and stay compliant.
Capital Gains Tax (CGT)
Capital gains are generally treated as part of taxable income in South Africa, although certain reliefs may apply. Exemptions exist for small gains, and primary residences may receive special consideration under the rules.
Investment Income Tax
Investment income includes earnings from bank accounts, savings, government bonds, or corporate bonds. This income is taxed as ordinary income for residents, while non-residents may also be subject to withholding tax on South African-sourced investments. Certain reliefs are available depending on the type and amount of income.
Rental Income Tax
Rental income is taxed as ordinary income for both residents and non-residents.
Dividends
Dividends from South African sources are generally exempt from tax. Dividends from foreign sources are taxed as ordinary income, though partial relief may apply. Non-residents may also be subject to withholding tax on dividends.
Donations Tax (Gift Tax)
Donations of property are generally subject to tax, although exemptions exist for transfers between spouses or property received before becoming a South African resident. Annual exemptions may also apply.
Estate Duty (Inheritance Tax)
Estate duty applies to the estates of residents and to South African assets of non-residents. Certain exemptions and reliefs may reduce the overall liability.
Corporation Tax
Corporation tax in South Africa is progressive, with small businesses potentially qualifying for turnover-based tax relief. Capital gains are included in taxable profits, though only a portion is considered for tax purposes.
Being aware of these taxes can help you manage your finances efficiently and avoid unexpected liabilities while living in South Africa.
How Pensions Are Taxed in South Africa
South Africa has a Double Tax Agreement (DTA) with the UK, which affects how pensions are taxed for expats. Pensions paid in consideration of past employment, including annuities, are generally taxed according to South African tax laws for residents with UK pensions.
Government pensions are treated slightly differently, and some pension income may instead be assessed in the UK if it was not paid in consideration of past employment. In such cases, the UK becomes the primary tax jurisdiction.
Foreign pensions for South African residents are typically exempt from local income tax, provided they were earned outside South Africa and are not related to public office service within the country.
Because pension taxation can be complex, it is recommended to seek reliable, bespoke international pension advice to ensure compliance and optimise tax planning.
UK Pension Options for South African Residents
Explore the main options for managing your UK pension as a South African resident and the key benefits of each approach.
Leave Pension in the UK
Keep your pension in the UK and continue to benefit from familiar arrangements without making a transfer.
Transfer to a SIPP
A popular solution offering tax-free growth, flexible investments, and potential inheritance advantages.
South African Retirement Annuity Fund
Transfer your pension locally to align with South African retirement planning and tax structures.
Tax-Neutral QROPS Jurisdiction
Transfer to a QROPS in a tax-neutral jurisdiction to maintain global investment flexibility, where appropriate.
Carefully considering each option and seeking impartial professional advice will help you choose the best pension strategy for your personal circumstances.
Stay Up to Date on South African Taxes
Navigating South Africa’s tax system can be complex, and rules around residency, provisional tax, and foreign income can change frequently. Staying informed about your obligations helps you avoid penalties and make the most of tax-efficient planning opportunities. Regularly reviewing your financial situation with a qualified adviser can help you stay compliant and take advantage of available reliefs.
Key Steps for Expats:
- Confirm South African tax residency status
- Declare foreign income and assets (including rental and investment income)
- Review income, capital gains, and dividend taxes
- Evaluate pension options (UK, SIPP, or local)
- Check double tax treaty implications
- Consider inheritance and estate planning
- Stay compliant with provisional tax and annual returns
Resources for Expats in South Africa:
SARS – South African Revenue Service: Official guidance on income tax, residency tests, and filing deadlines.
UK Government – Living in South Africa: Practical guidance for UK nationals on tax, pensions, and residency obligations.
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Ready to Get Started?
Navigating taxation, pensions, and investment options in South Africa can be complex. Speak to an expert advisor to ensure your financial planning is compliant, tax-efficient, and aligned with your long-term goals.
What does the obligation free call include?
An initial 15-minute introduction call explaining our services and how we can help.
We go through a fact-finding exercise so we can then provide a full financial planning report including a personalised retirement forecast with future projections and work out how on track you are.
Lastly, we will provide a recommendation on any areas where we feel you could improve.
Who is SJB Global and meet your adviser
Our regulations, Independence and Fees
Our process from start to finish
Area we help with including:
UK Pension Advice
Retirement Planning
Investment Planning
Tax Planning
US Expat Services
International Estate Planning
Note: Minimum managed assets for SJB Global is £100,000 or currency equivalent.
Licensing & Regulations
Nexus Global specialises in providing a regulatory platform and compliance support to international financial advisers and intermediaries to enable them to meet regulatory requirements to provide their clients with a professional service. The financial advisers trading under SJB Global are members of Nexus Global. Nexus Global is a division of Blacktower Financial Management (International) Limited (BFMI). All approved members of Nexus Global are appointed representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission (FSC) and bound by the rules under licence number 3647: http://www.fsc.gi/regulated-entity/blacktower-financial-management-international-limited-3647.