South African Expats

South African Wealth Tax

Although, South Africa, has taken more radical steps than the other countries and it has proposed a wealth tax that is looking to tax a modest wealth of 3.82 Million ZAR. As stated in the videos, this is not a large amount of money to have in your net worth, this includes, your house, any artwork and any money in the bank.

What do expats get taxed?

For expats though, it requires that any South African abroad are taxed at 45%, on anything over 1.25 Million ZAR. This might be a bit, however, for the average expat in a 2019 study by HSBC earning 99,000 GBP (well over the RSA tax band) with significantly more in places such as Tokyo, Mumbai, Shanghai, Singapore it can impact a lot of RSA expats.

Although, as of March 1st 2020, any expat earning over this level of 1.25 ZAR will be taxed at the RSA in accordance with the normal RSA tax tables.

Double Taxation Agreements

Double tax agreements can work as an expat that if you are in a low tax income such as the middle east it is unlikely that RSA has a DTA. See below for the full list.

You must apply on an annual basis and to meet the requirement you must declare your foreign income and claim an exemption in RSA. This will then be tested by audit and need clarification of tax certificate from the tax jurisdiction to state that the applicant is a tax resident of the foreign jurisdiction.

It is worth noting that this is an annual occurrence that will need to take place. With proving to SARS you are a non-tax resident in DTA country with the RSA.

What can you do as an RSA expat?

RSA expats can go down the formal process of declaring themself a non-resident for tax purposes in RSA. This ensures that under South African requirements, under the income tax act to ensure classification as a non-resident in accordance with RSA tax residency tests.

Although, this alone doesn’t mean you automatically become a non-tax resident it does play a vital part.

You will need to apply with an application from the South African Reserve Bank to record the formal emigration.

One note is that this is for people that have a full intention of residing outside of RSA with clear intentions not if you intend to go back at all.

To determine whether a residence RSA imposes two tests:

Physical Residency test:

This states that in the year to date when tested 91 days in aggregate of the year when under assessment and 91 days in aggregate in each of the 5 years after the year of assessment.  And 915 days aggregate 5 years after the assessment.

Ordinary Residence test:

This can get quite complex so have attached some links, but in short suggests that if you have a settled place of residence in RSA, where they stay most often, nature of business, family, an association of any clubs etc

South African Pensions

South African Expats that have a pension can access it at the age of 55 but under the new laws drafted on 1st March 2021 by the RSA treasury. It states that retirement savings could be withdrawn prior to retirement after 3 years from the date that you break your tax residency. Requiring expats to prove non-residency for 3 years under the RSA residency test from 1st March 2021 before being allowed to withdraw the funds.

Conclusion

As an RSA expat you need to take the time to review your situation and under your personal circumstances in relation to your finances under what action might be deemed appropriate for you.

If you want to review the new tax rules and what you can do to reduce the amount of tax you need to pay, please email me at info@investmentsforexpats.com

International SIPPs

An International Self Invested Personal Pension (SIPP) is simply an offshore UK pension vehicle for allowing investors to control their investment strategy, and retirement, themselves. It offers more control to the individual and does not rely on trustees to make decisions for them.

The difference between a regular SIPP and  International SIPP is where the money is held. An international one is usually outside of the UK for tax purposes and investment opportunities.

A common international SIPP request we get is to combine their pensions from previous employers and as a way expats can save if they are earning enough money that they don’t need to access it in the short term.

If your fund is likely to exceed £1,000,000 by retirement, then a QROPS should be considered. SIPPs are the main-stay of retirement planning and are also inheritance tax-free and good for IHT planning.

UK pension transfers by overseas advisers

Beware recommendations of an investment made into an investment bond via a SIPP. This is often very costly bad advice dictated by the limited licenses and lack of knowledge of the advisers/advisers! In fact, some of the better advice, following UK regulations, is only available through quality specialist pension advisers who understand regulations in the UK, and do not base their advice on who pays the highest commission.

Why would a SIPP be better than a QNUPS or QROPS?

With the new rules brought in April 2015 then some benefits, such as income and flexibility to take capital have improved dramatically under a SIPP. Also, the fact is that QROPS or QNUPS are far more expensive than most SIPP products, if not initially then in terms of annual charges. Also, whilst a SIPP should never be utilised with investments held in an investment bond, and therefore be a fraction of the cost of QROPS, thus improving returns over QROPS.

In most cases, people up to the age of 74 are better off with a SIPP for retirement planning, rather than a QROPS, because of the Budget 2014 and new rule changes on 6 April 2015.

Pension Transfers

If you are an expat who wants to transfer their pension into an International SIPP or ROPs, it can be a good idea for several reasons.

If you want to be outside the UK for a long time then you can transfer it all offshore and have it in one place. Even if you want to return to the UK it is not illegal to have an offshore bank or pension, it just resides in a different place and you can still access exactly the same as any pension in the UK.

If you have a defined contribution pension (DC) then these are relatively easy to transfer. These are the newer type of pensions where your employer pays in a certain amount and so do you. If you are wanting to transfer a defined benefit (DB) pension, then this is much more time-consuming and complex. This is because of the regulations.

They were brought in to protect people from losing everything they had worked for.

As an expat, most go for an international SIPP because they can’t set up a SIPP in the UK. This isn’t a bad situation as at the same time you can mitigate tax and if you move in the future you can still continue to pay into the SIPP.

Many transfer their frozen or redundant pensions into the SIPP so that they can consolidate all their pensions into one manageable space.

Due to the new transfer tax of 25% on ROPs it’s doesn’t make sense to transfer into one of these unless you are near the life time allowance (LTA) in which case there are some good benefits to having a ROPs.

However, a good point about ROP’s are, ROPS are in line with UK pension freedom rules which were introduced on 6th April 2015, permitting people to access their pension savings from Age 55.

With the pension transfer, our process is simple, we will need to speak to you and ascertain amounts (LOA) and complete a risk profile. After that, we can create your investments and choose a platform with you.

Once all the paperwork is complete we can then transfer the pensions over, this process usually takes a few weeks due to the paperwork but once done, you shouldn’t have to go through it all again!

Here are the reasons why some of my clients have transferred their pension:

• Consolidate all their pensions
• Their previous pensions were just sat there in company funds
• Tax efficiency
• Listing a beneficiary
• Potentially increasing their returns over leaving it where it is

If you are looking to transfer your pensions as an expat, then please email me at the bottom of this page and I can arrange a call.

Investment Platforms

As an expat, you have a lot of options when you come to investing. Firstly, as a starting point, you are going to need a platform to invest through. When you have the platform you can either invest a lump-sum amount or monthly amounts.

The platforms allow you to invest in different investments. You can have a DIY platform or an advisor platform – This is where you must have an advisor in order to create the platform.

With any platform, there are varying costs and functions. The cost is an important aspect, when searching for a platform you need to make sure that are aware of the full cost. Many will have hidden costs and this can eat away at returns if you don’t keep an eye on it.

If you are using an advisor make sure that they tell you the cost if the platform and their fees as well and make sure they’re reasonable.

Some good platforms for UK expats are:

Ardan International

Isle of Man- Advisor-based platform- good investment options cost around 0.5% without advisor fees. A branch of RL360 and a lowers cost (in my option better) than the RL360 PIMS and other high-cost bond options.

Capital Platforms

Luxembourg based. Founded in 2002 in Singapore originally as Boston Direct Management, they have expanded their global outreach across Asia, Europe, Africa and South America. Has a range of ETFs and funds and charges 0.2-1.2% a year.

DBS Securities

Singapore-based, good DIY platform low cost, but hard to navigate. Self-managed account.

Etrade

A low-cost option that is more for stock options. Fees are $6.95 a trade. It is U.S based so are subject to U.S taxes on death as it forms part of your estate.

iFast

A self-managed platform. The iFAST group of companies is licensed in Singapore through its Capital Market Services Licence and Financial Adviser Licence (also CPFIS registration), Hong Kong with an SFC Type 1 and Type 4, and Malaysia with a Capital Market Services License and FIMM registration. iFAST Financial India Pvt Ltd (India) is an AMFI- registered Mutual Fund Distributor.

No lock-in or early surrender penalties are applied, but in order to move wrappers from elsewhere, e.g. pensions, a wrap account is required.  This incurs an undisclosed percentage fee and is tailored to advisers.

Neither the Prestige nor the basic platform are available outside of Singapore, Hong Kong, Malaysia, or India.

Interactive Brokers

Interactive Brokers was founded as a Broker-Dealer in 1977. Consolidated equity capital is at approximately $6 billion, and the firm’s founder, Thomas Peterffy, continues as chairman and CEO. The firm and its affiliates execute nearly 1,000,000 trades per day.

Interactive Brokers Group and LLC are rated investment grade by Standard & Poor’s (BBB+).  The platform charges a complex commission structure, with trade costs dependent on your country of residence.  Broadly, ETFs and stocks can be traded at a minimum of $4-$8 under the fixed pricing structure.

High volumes of trades are rewarded, but on average, the occasional trader is likely to pay $20 per month according to the site.

Intermaxx

The platform provides access to 900 funds and thousands of ETFs.

Exchange rates on cash are fairly competitive, and there is a low minimum. However, it does not allow for you to hold existing wrappers or bonds on the platform, and can therefore trigger unpleasant tax charges.

Although a wide range of funds is offered free of the initial charge, many contain high total expense ratios, which can eat into your returns.  Costs of dealing with stocks and ETFs (5,000 available) are good.

Useful tools such as the ‘Portfolio X-Ray tool’ and Morningstar equity research are included in the platform.

Internaxx can take up to 55% of annual fund management fees in retrocessions, which has been criticised for lack of transparency. Costs of stocks and ETF trades are between €14.95 to €50 (US/CA vs. less traded markets) and up to 0.09% commission. Trading over the phone costs an extra €20.

The most significant cost to expat users seeking a long-term investment platform is the flat fee (replacing the 0.2% pa custody charge). This is €45 if you don’t trade during the quarter, but free if you trade regularly

Investors Trust

A Cayman based platform with locations in Labuan, Portico, it is an advisor based with a range of options their cheapest platforms being the access that can be brought down to 0.5% plus admin fees of 7 USD per month, a good online system.

Novia Global

Novia Global launched to market in October 2015, with a stated aim of bringing the benefits of the latest in online wealth management technology to the key international markets.

The service provides financial advisers, private banks, discretionary fund managers, and trust companies with the tools required to provide their offshore investors with the same high levels of service and choice available in the UK.

Platform One

A UK and international investment platform service. It has been designed to deliver a secure, high-quality investment platform for the UK and international marketplace. Via Platform One, advisers and their clients from around the world can access the benefits of a UK regulated wrap platform.

The service enables financial advisers to consolidate and manage all their high net worth clients’ investments in one place – hence the term ‘wrap’ platform. Platform One offers what looks to be three core services, each providing access to a wide range of products, funds, and services via the platform.

Praemium

Established in Australia in 2001, Praemium is used by financial advisers and investment managers to manage or administer over A$100 billion, or £59 billion worth of investments across 300,000 accounts.

Praemium provides investment platforms, portfolio administration, and CRM solutions.  The company has offices in Australia, the UK, Jersey, Armenia, and Hong Kong.

Praemium launched its services into the UK market in 2008, where it is now one of the fastest-growing discretionary platforms available. In the UK the Praemium group is regulated by the Financial Conduct Authority.

Platform costs start at 0.35% and tier down for larger amounts, offering exceptional value for money for the end client.

Raymond James

Raymond James Financial is an American diversified holding company.  It provides financial services to individuals, corporations, and municipalities through its subsidiary companies that engage primarily in investment and financial planning.

Additionally, it offers investment banking and asset management services. The holding company was incorporated in 1962 and listed on the NYSE in 1983. Raymond James’ 3 million client accounts (via nearly 7,200 financial advisers) are focused in the US and Canada, although a portion are also worldwide.

Total assets under management amount to approximately $643 billion. Raymond James is an LSE member firm with direct market access. The Financial Services Compensation Scheme (‘FSCS’) currently covers 100% of the first £50,000 of UK investments on the platform. The platform is targeted at financial advisers where management fees, brokerage charges and initial fees are decided by the adviser. If the client no longer has an adviser, dealing charges are high (£27 – £52) and the flat custody charge of 0.5% applies.

For expat investors, costs of transfer of restricted stock (£200 per transfer) to the UK based platform may be significant given the nature of underlying assets within some offshore products.

Saxo Bank’s Platform

Saxo Bank facilitates online trading of over 30,000 instruments, including bonds, futures, FX, CFDs, and stocks.

In terms of the stocks available, Saxo includes over 3,000 ETFs.  Prices for exchange-traded products are delayed unless the investor subscribes to the live feed, however, this is of less relevance to long-term investors.

The minimum investment is $10,000.  Saxo Bank charges commissions on trades – normally about $15 equivalent, which is where it generates most of its revenue.

Underlying this, custody charges of 0.12% p.a. with a monthly minimum fee of EUR 5.00 will apply.  Transfers of stocks to your account outside Saxo Bank incur a €100-€160 exit charge, and no trades for 6 months will mean you incur a $100 equivalent inactivity charge.

Swissquote Ltd

Swissquote Ltd Is the London-based subsidiary of Swissquote Bank and provides forex, index, commodities, and bond CFDs to traders in the European Union.

The company is regulated in the UK by the Financial Conduct Authority (FCA). In addition: Swissquote Financial Services, based in Malta, is an investment services company regulated by the Malta Financial Services Authority. Swissquote Bank MEA Ltd is regulated by the Dubai Financial Services Authority (DFSA).

With these platforms, you can invest a lump sum or you can top them up monthly with some of the disposable cash you have. Clients I have all have various methods, some prefer the monthly options because they have a set salary and job and then there are others who are on contract work and do lump sums at each quarter of the year if they have a surplus.

ROP’s

ROP’s or QROP’s are known as Recognised Overseas Pension Schemes or Qualified Overseas Pension Schemes.

These are where you can transfer your pension scheme to another country where HMRC recognises that pension scheme in another country.

Since March 2017 transfers to QROPS can come with a 25% tax charge, but most people can avoid it. No charge applies if you are resident in the country where the QROPS receiving your transfer is based, or you reside in a European Economic Area (EEA) country and the QROPS you are transferring to is based in another EEA country.

Likewise, there’s no charge if you work abroad and are transferring your UK retirement pot to a workplace pension run by your employer.

But get your paperwork in order; if your UK pension does not receive the correct information, it will charge you the 25% tax for the transfer and you’ll need to apply for a refund at a later date. Also bear in mind if your circumstances change within 5 years, for example, you move to another country, you may then have to pay the 25% tax charge.

Moving to a QROPS still means abiding by some UK rules, the most important one being you can’t access your pension before age 55 (if you do you face a 55% tax charge). Other UK tax rules can apply for 5 years after you have transferred.

If you moved into a QROPS before 6th April 2017 you have to reside outside the UK for 5 consecutive tax years before you can draw on your pension. This has been upped to 10 years for those transferring after that date. Before you transfer, find out what tax you will pay on the pension income, as this will vary.

ROP’s can be very good if you are close or over the lifetime allowance and there are ways that you can then reduce the amount of tax you pay when you go over that lifetime allowance.

If you want to ask me some questions on ROP’s please email me at info@investmentsforexpats.com.

Inheritance Tax

UK Inheritance tax (IHT) is the tax that is paid on an estate when the owner of that estate dies. Depending on certain criteria, the tax may also be payable on gifts or trusts made during that person’s life.

Typically, UK Inheritance Tax is paid by the executor using funds from the estate of the deceased. Trustees with assets in a trust are usually responsible for the payment on IHT in that trust and sometimes people may have to pay IHT on gifts received. However, the payee of IHT is dependent on a number of factors, and each circumstance may affect who should pay the IHT owed.

Even if you are an expat living outside of the UK, you will still be subject to IHT in the UK if you are deemed to be of a UK domicile status.

If you are UK domiciled and your estate is valued at over £325,000 your estate will be subject to IHT – either 40% or 36% on the amount over the threshold. Since 2007, this threshold has increased to £650,000 for married couples and civil partners, providing the executors transfer the first spouse/partners unused IHT threshold to the second partner when they die.

It is essential to understand that being classed as non-resident in the UK for tax purposes, as your domicile is unlikely to have changed, you will still be liable for UK IHT.

If you’ve got a non-domicile status in the UK, only UK based assets will be liable to IHT in the UK. However, “living outside of UK” is not a qualification for this status alone.

If you are non-UK domiciled and non-UK resident at the date of death, then rather than your worldwide assets being subject to UK IHT, it will only be your UK assets that will form part of your estate which will be subject to UK IHT.

Any Non-UK assets (although not subject to UK IHT) may well be subject to taxes in the county in which you reside and therefore we recommend you seek professional advice as required.

Mitigating UK IHT as an Expat

Firstly, and most difficult, is to change your country of domicile away from the UK which is almost impossible unless certain steps are taken. Secondly, and this is where planning can help, you can protect your estate from IHT by moving them into tax-efficient financial structures.

Changing Your Country of Domicile

While there is no single legal definition of your country of domicile, it will often be established according to three factors: where you were born, if you have assets in that location and where your father was born. When it comes to determining your country of domicile, the taxman will interpret the conditions and draw their own conclusion about whether you are still domiciled in the UK.

Due to IHT being such a major revenue earner for the UK government (they collect over 5.4 billion a year GBP) changing your domicile can be a difficult and stressful process – and even then your efforts may not be considered enough.

Changing your domicile tax status requires much more than simply showing that you now live abroad, you also have to be able to prove that you have no intention of returning to your original country of residence. You can attempt this in a number of ways, including:

•     Relinquishing your UK passport
•     Severing all links with social organisations and join new organisations in your country of residence
•     Purchase property in your country of residence and selling all your UK based property
•     Closing UK bank accounts
•     Many more actions

https://www.gov.uk/government/consultations/reforms-to-the-taxation-of-non-domiciles/reforms-to-the-taxation-of-non-domiciles – Details of the changes in taxation for those deemed non-domicile

However, as it is the preserve of the UK taxman when it comes to determining whether your country of domicile has changed, this is the least recommended of the two approaches. Of course, you may also then be subject to IHT in your new country of domicile. Before beginning on this path, ensure that you have spoken to an adviser to have all the facts and information.

Protecting Your Assets From IHT

Please read my full guide on IHT and trust for more information on this topic or get in touch on the form below.

You can email me at info@investmentsforexpats.com if you have any questions about IHT as an expat and ways you can potentially mitigate it. 

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Reviewed by Henry Temple-Baxter, CISI Level 4 qualified · Last updated 10 October 2026. This page is general information, not personal advice.