NEWS AND INSIGHTS

Post-emigration Income: The Big Shake-up?

Why Your Post-Emigration Income Is Now Stuck in South Africa

29 October 2025

AUTHOR: MATHYS BRIERS-LOUW

For years, South Africans believed that once they completed the now-outdated “formal emigration” through the South African Reserve Bank (SARB), they had officially escaped South Africa’s exchange control system. That belief is now dangerously flawed.

If you thought leaving South Africa and ceasing tax residency with SARS meant freedom from administrative red tape, think again. In a significant policy shift that has caught many ex-residents off guard, SARB has just tightened the noose on post-emigration income transfers.

Exchange Control Circular (15/2025), issued on 22 October 2025, introduces a game-changing requirement: if you are a non-resident, you now need explicit SARS approval before your bank will transfer income, like dividends paid by South African companies to you abroad. This is not just another box to tick; it is a fundamental shift in how non-residents access their own money.

What Changed: The TCS AIT PIN Bombshell on Post-Emigration Income

Until recently, many non-residents could transfer certain types of income (like dividends and rental income) with relative ease, provided withholding taxes were paid and the bank could verify one’s non-resident status.

Not anymore, decided the National Treasury, in consultation with SARB and SARS.

Most income due to non-residents that leaves South Africa now requires one of two SARS approvals:

• A Tax Compliance Status (TCS) – Approval for International Transfer (AIT) PIN;
• A Manual Letter of Compliance (MLC – International Transfer) if you are inactive or not registered on SARS systems.

This applies not only to dividends, but also to:

• Trust distributions (B.3(B)(iv))
• Rental income (B.3(B)(v))
• Royalties and IP income (B.3(B)(vi))
• Any other post-emigration income earned locally.

Authorised Dealers (banks) are now prohibited from remitting these funds abroad unless the AIT or MLC is in hand. Even long-standing non-residents and emigrants under the pre-2021 regime are being caught in the net.

This represents a sweeping expansion of SARS oversight into every rand that leaves the country, applying equally to normal non-residents merely investing in SA and individuals who ceased their residency years ago.

The mind boggles at the SARS capacity to allocate manual letters (MLCs) where the investors have never resided in South Africa.

The question then is: was this truly the intention of the National Treasury, or was this merely the result of the wording SARB chose to use in their updated October 2025 AD Manual?

The Cruel Irony: Financial Emigration Was Supposed to Simplify This

Remember when thousands of South Africans paid thousands of rands to complete the “formal” or “financial emigration” (sic) process through the SARB before March 2021? They were assured that once they had cleared the exit tax hurdles and obtained their emigration approval, future income transfers would be straightforward.

The Death of “Formal Emigration”

When SARB scrapped the old “formal emigration” process in March 2021, the only authority empowered to determine your residency became SARS. Without a SARS letter confirming cessation of tax residency, you are still regarded as a South African (tax) resident, what SARB now calls a “resident temporarily abroad”.

That means a “formal/financial emigration” certificate means absolutely nothing today. One must now:

1. Update your residency status with SARS, and
2. Obtain your official SARS Letter of Non-Residence, and
3. Apply for an AIT or MLC before any post-emigration income can leave South Africa.

Until then, your funds, dividends, rent, trust distributions, and interest are legally trapped in South Africa.

Why This Matters

This is not red tape; it is a full-scale takeover of exchange-control enforcement by SARS. Every offshore payment is now effectively vetted by both SARS and SARB, closing historical loopholes that once allowed “clean” post-emigration flows with minimal oversight.

Even those who emigrated properly years ago are shocked to discover that their previously “approved” status does not grant automatic transfer rights anymore.

Practical Example

Suppose you emigrated in 2020 and still hold shares in a South African company. When the company declares dividends in 2025:

1. Dividend tax (20%) is withheld at source.
2. Before the after-tax dividend can move abroad, your bank will demand your SARS Letter of Non-Residence and AIT/MLC approval. Remember that once having ceased tax residency with SARS, one needs an emigrant account, as post-emigration funds cannot leave or enter SA via a Resident account.
3. Only once these are verified may your bank transfer the funds under the correct Balance of Payments (BoP) code.

Key Takeaways

• “Formal emigration” under SARB no longer has any legal standing.
• The SARS Letter confirming having ceased tax residency is now the golden key to any offshore transfers.
• Post-emigration payments (dividends, rental income, trust distributions, royalties) must be backed by an AIT or MLC.
• Banks will not (and cannot) move your money without these.

Bottom Line

If you left South Africa years ago but never obtained your SARS letter of ceasing tax residency, your emigration is (now) not complete. To unlock your post-emigration income, you must regularise your tax residency with SARS and obtain the necessary AIT or MLC approval. Only then can your bank lawfully remit your funds abroad.