When relocating from South Africa to the UK, careful planning is essential to ensure a smooth transition, particularly regarding tax and legal matters. 

Be prepared

We recommend that you seek professional advice in both countries at least a year before your move. The UK tax year (6 April to 5 April) differs from South Africa’s (1 March to 28/29 February), which can affect your tax residency status. 

Your UK tax residency will always begin on the 6 April preceding your arrival in the UK, even if you arrive mid-year. However, in certain cases, you might qualify for “split year treatment.” This can provide valuable relief from UK tax on income or gains earned during the overseas portion of the year. 

By having advisers in both countries, it means they can work together from the beginning to ensure coordinated advice and prevent potential conflicts. At Gerald Edelman, we have experience working with South African advisers to assist clients relocating to the UK. We are happy to work with your existing adviser, or through our network we can connect you with tax and legal professionals in South Africa. 

Immigration and tax status

It is also important to review your immigration status and the basis for your UK residency. While the UK maintains separate immigration and tax systems, they are interconnected. For example: 

• Visa matters: Your visa category (e.g. Skilled Worker, Investor) can impact your tax obligations and available reliefs. 
• Residency misalignment: Your tax residency status may not always align with your immigration status. For example, you could be considered a UK tax resident before physically relocating or obtaining a visa. 
• Long-term implications: Some visas offer paths to permanent residency or citizenship, which can have significant, long-term tax consequences. 

Understanding these nuances is crucial for effective tax planning and compliance.  

Understand the new rules effective April 2025

Residence and domicile are very much interlinked under the current regime; however, the concept of domicile is to be abolished effective April 2025 and tax will be residency based.  

The Statutory Residence test determines your residence status for UK tax purposes. It considers factors such as days spent in the UK and your residence status in previous tax years. 

Understanding whether remittance basis can be claimed if you move before 5 April 2025 is important. The UK tax regime for non-domiciled individuals underwent significant changes this year with the aim to tighten tax rules so that everyone who is a long-term resident in the UK pays their taxes here. To read more about the new rules, see our article here. 

In addition, you need to consider your South African tax residence status. Will you cease to be tax resident in South Africa after your move? This is essential to know to avoid being considered tax resident in both countries and therefore subject to double taxation. 

Double Taxation Agreements (DTA)

It is possible to be a tax resident in both South Africa and the UK simultaneously, which can lead to the same income and gains to be taxed in both countries.  

DTA are therefore necessary to establish which country has the taxing rights to avoid double taxation. The UK has negotiated DTA with South Africa and we can assist in navigating this according to your scenario. 

Pre-arrival planning

Understanding UK tax legislation is essential, in particular how current tax regulations apply to your income, holdings and assets. However, before becoming a UK resident, it is a good idea to identify and maximise opportunities by considering these steps too:  

• Identifying and maximising pre-arrival “clean capital” (funds which derive from pre-residence income or gains and can be remitted to the UK free of tax). 
• Structuring overseas bank accounts to segregate clean capital from post-arrival non-UK income/gains.  
• Rebasing assets for Capital Gains Tax purposes prior to UK residency, to minimise tax on future disposals.  
• Reviewing existing asset and offshore structures, trusts, investments and business interests and restructuring where appropriate.  

Additionally, it’s important to note the new rules effective April 2025. These changes may impact your UK tax position and offer new opportunities.  

International employees

The UK offers “overseas workdays relief” during the first three years of UK tax residency. This beneficial provision allows eligible individuals to be taxed only on the portion of their salary related to UK workdays. However, taxation in other jurisdictions where services are performed depends on local laws and any existing double tax treaties with the UK. It’s advisable to seek professional guidance to navigate these tax considerations effectively. 

Property in the UK

Buying a property 

Once you move to the UK, if you are considering purchasing a property, you will need to understand the potential Inheritance Tax implication. For those claiming remittance basis taxation, careful consideration is needed when bringing funds into the UK for a property purchase to avoid inadvertently remitting taxable foreign income or gains.  

To rent or buy?

Before buying a UK property, consider renting first to explore the location and to avoid the additional 2% overseas surcharge when you buy. Note that the 3% second homes surcharge applies regardless of location or residency. Also, be aware of ground rents and leaseholds, which can complicate property financing in the UK, especially for short-term leases. 

Property ownership 

If you own a property in South Africa and are planning on renting it out whilst in the UK, you may still be required to submit tax returns and be taxed in South Africa on such income. This income would also be taxed in the UK subject to the new rules effective April 2025. 

Estate planning

When moving abroad, it’s essential to have a Will in place to manage your worldwide assets. This includes assets remaining in South Africa and those located in other jurisdictions. Upon becoming a UK resident, creating a UK will to address your UK assets is crucial too. 

Additionally, understanding estate taxes is vital. Consider the potential impact of both South African and UK estate taxes on your worldwide assets.  

Retirement savings

If you have a provident or pension preservation fund from which you’ve made a withdrawal, or a retirement annuity fund, it is crucial to understand the UK tax implications of such withdrawals. These retirement savings may be subject to UK taxation depending on various factors, including your residency status, the type of fund, and the specific withdrawal terms.  

How can Gerald Edelman help?

Given the complexity of the UK tax system, consulting with tax specialists is crucial to optimise your tax position and ensure compliance.  

If you are considering a move to the UK and would like further advice, please contact our International Tax Partner Sonal Shah.