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Posted Mon, 15 Nov 2021 13:45:57 GMT by Patrick Lowery
Hi: I need to apply for tax relief on a pension in South Africa. The HMRC advice is to apply for tax relief before you get taxed on foreign income. In SA a pension payment is taxed at source (fund) so i need a directive from SARS to the fund to not deduct tax. How do i get this directive?
Posted Tue, 16 Nov 2021 14:17:36 GMT by HMRC Admin 2
Hi,

If you are looking to exempt a South African pension from South African tax, then you would need to speak to the South African authorities on what they require if you are paying tax in the UK.

If you are looking to exempt a UK pension because you are tax resident and paying tax in South Africa, then please complete the relevant double taxation form.

UK-South Africa Double Taxation convention (SI 2002 number 3138) (South Africa-individual)

Thank you.

 
Posted Wed, 17 Nov 2021 10:30:43 GMT by Patrick Lowery
Thanks. It is the former. The SARS approach is for the individual to submit to HMRC a form RST01 which should be signed and stamped by an HMRC Official and returned to SARS. SARS will then issue a directive to the pension fund administrator to pay the pension without deduction of Tax. The very nature of this process and the advice by HMRC is that this process needs to be finalised in advance of the payment being made. I have successfully completed this process twice now, previously, but have been informed by HMRC this year that they will not sign and stamp the RST01 as it refers to a date in the future and they cannot guarantee that i will remain tax resident. This ruling defeats both the process developed by SARS and the fundamental principle of Article 17 of the DTA between SA and the UK wrt assisting pensioners to not have to pay tax in SA and then seek a refund.

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