Part 2: How to Cease Your Tax Residency

11.11.2025 by the Nolands Team

Welcome to Part 2 of our expat tax series, where we untangle the tricky threads that still tie you to South Africa’s tax net even after you’ve packed up and moved abroad. In this chapter, we’re getting into the practical side: “ceasing tax residency”, what that actually means, how to do it right, and why skipping steps can cost you more than just sleep.

The process can look intimidating on paper, but with the right guidance it’s surprisingly manageable.

Let’s unpack the steps.

Understanding the "New" Emigration Process

The old “financial emigration” route through the SA Reserve Bank is now a thing of the past. Since 1 March 2021, leaving South Africa for good is no longer about clearing a path with the SARB: it’s all about SARS.

Today, the process is entirely tax-focused. Your goal is to prove to SARS that you’ve permanently ceased to be a South African tax resident. It’s about showing, with the right forms and evidence, that your personal and economic ties have genuinely shifted abroad. This change makes the process more streamlined, but it also puts the emphasis squarely on compliance, timing, and accurate reporting.

Let’s make the process a little clearer.

Step 1: The Declaration to SARS

The first move might feel like just paperwork, but it’s actually your foundation for a smooth exit. You need to officially tell SARS the exact day you stopped being a South African tax resident. This is done using the RAV01 form on eFiling.

Why it matters: the date on which you cease residency determines which income and assets fall under South African tax rules and which don’t. It affects your exit tax, your final tax return, and how smooth the rest of the process will be. Act too late, and you could end up underpaying or overpaying tax or creating unnecessary hassles with SARS.

Think of it like setting your departure coordinates before a long trip. Get them right, and the journey is straightforward. Get them wrong, and you’ll hit turbulence you could have avoided.

Step 2: The Exit Tax

Here’s where things get serious. The day before your ceasing residency date, SARS pretends you’ve sold all your worldwide assets at market value. They call it a “deemed disposal” and it’s how they calculate Capital Gains Tax on your way out.

There are exceptions. Your South African property isn’t included because it will be taxed when you actually sell it. Cash and certain retirement funds are also excluded.

Think of the exit tax as settling your final bill with South Africa before you officially change your status. This is often the most complex calculation in the whole process and one you don’t want to tackle without a seasoned navigator.

Step 3: Your Final Tax Return

Once you’ve calculated your exit tax, the next critical step is filing your final tax return. This isn’t a standard return; it’s a special submission covering the period from the start of the tax year up to your cessation date. Crucially, it must include the capital gain calculated from the deemed disposal of your worldwide assets.

Accuracy is everything. SARS will expect detailed valuations, supporting documentation, and a clear record of how your figures were derived. Mistakes, omissions, or approximations can trigger follow-up queries, audits, or even penalties long after you’ve settled abroad.

Beyond compliance, this return is strategic. The way assets are valued, the dates applied, and the supporting evidence provided can all influence your tax liability.

How Nolands Makes It Manageable

This is where we take the stress off your shoulders. Our team helps you:

Determine the date to cease residency
Get accurate valuations for your worldwide assets
Handle all SARS correspondence and submissions
Ensure every step is airtight to avoid penalties later

It’s about clarity, precision, and giving you peace of mind that your move out of the South African tax system is clean and final.

What’s Next?

To recap: you declare your cessation date, settle your exit tax, and file your final return. Done right, that’s the path to officially closing your chapter as a South African tax resident.

In Part 3 of our expat tax series we’ll look at what happens after SARS approves your non-resident status, including how to manage your remaining South African assets, access your retirement savings, and plan your estate as a non-resident.

Ready to take the next step? Contact Nolands Tax today and let us guide you through the process with confidence and care.