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CGT deemed disposal on emigration

Understanding Section 9H before relocating from South Africa

UNDER SECTION 9H of the Income Tax Act, when you cease to be a South African tax resident, the law deems that you have disposed of all your worldwide assets on the day immediately before your residency status changes.

This is a deemed or theoretical disposal, as you are not actually selling or transferring ownership of your assets.

The rationale behind this provision is that SARS will lose its taxing rights over your assets and investments once you become a non-resident. Section 9H therefore ensures that SARS can tax any accrued gains on your assets before you cease residency.

Assets subject to deemed disposal

The deemed disposal rule applies to a wide range of assets, including:
• Investments (shares, unit trusts, etc.)
• Foreign properties or vacation homes
• Personal belongings of significant value (artwork, collectibles, etc.)
• Cryptocurrencies and other digital assets

However, there are exceptions to this rule. Certain assets are excluded from…

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