Judge Dennis Davis has given his endorsement to international pension structures for qualified South Africans.
The highly respected Judge, a member of the Commission of Enquiry into Tax Structure of South Africa and Technical Advisor to the Constitutional Assembly, made his comments in a webinar to wealth managers in May. Davis said the Davis Tax Committee, which he chaired, examined international pensions as part of their review but did not make any recommendations. He went on to say that the committee was primarily concerned where pensions structures were used as a cloak for other financial transactions.
Judge Dennis underlined the legitimate need for expats to have access to legitimate offshore pension structures. He confirmed that expatriates were wholly entitled to use offshore vehicles, subject to following South African Exchange Controls. Indeed, he went further, saying that expats had a legitimate need to hedge against Rand devaluation and gain the exposure to world stock markets that international pensions provide.
‘Other than that, no steps have been taken of any meaningful kind to deal with international pensions, to the extent that if you have a reliable one which will give you good returns, be my guest. But it has to be a genuine structure,’ the Judge said.
Most South African expatriates are eligible to use international pension structures for their savings and investments. Concerns about further tax grabs and investment restrictions on South African domiciled pensions make them a sensible and popular option for South Africans working overseas.
They are highly tax efficient, offer numerous other advantages and have now received the endorsement of the good Judge himself.
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