Tax on property, money and shares you inherit in the UK

This is because any Inheritance Tax (IHT) due should be paid out of the deceased’s estate before any cash or assets are distributed to the heirs.

However, the recipient is liable to income tax on any profit earned after the inheritance, such as dividends from shares and to capital gains tax on the increase in value on assets after the date of inheritance.

The main exception is if you received a gift during a person’s lifetime. These lifetime transfers are known as Potentially Exempt Transfers (PETs). These gifts or transfers achieve their potential of becoming exempt from IHT if the taxpayer survives for more than seven years after making the gift. If the taxpayer dies within 3 years of making the gift, then the IHT position is as if the gift was made on death.

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SARS requires you to declare your Worldwide Income

SARS has lodged a Five Year Compliance Drive this month on all South Africans residents working in foreign countries. Pravin Gordhan mentioned in his Budget Speech that SARS is going to target all South Africans working abroad. Since these announcements various changes has been brought about regarding the responsibilities of the South African individual, company, trust and/or cc with foreign interests.

So as a South African resident working abroad, how will the changes affect you directly and immediately? You have to be informed to be able to make informed decisions.

TWO key factors you have to comply with;

You must be registered for Income Tax in South Africa or have an existing income tax reference number
You are compelled to submit an Income Tax Return EVERY tax year to SARS in which you have to declare your ‘worldwide’ income.

The above TWO key factors apply even though:

Your earnings qualify for the section 10(1)(o