UK Tax Refunds?

[Erichero]

Hi everyone

I received a tax refund from my time in the UK and am now filling out my SARS tax returns.

As far as I understand, there's some kind of agreement between SA and the UK that my UK tax refunds now get paid to the SA govt.

I phoned SARS and the responder didn't seem to have a clue. I'm wondering if any of you know more about this. (Something to do with "double taxation agreement"?)

[Dave A]

I'm no tax expert, but for what it might be worth..

By my understanding the general principle is that you should not be taxed twice on income - i.e taxed under UK tax legislation and taxed under South African tax legislation.

Under this principle I'd guess that you will be liable for tax in SA on any income that was not taxed in the UK.

Hopefully someone else can clarify that, but if there is any reasonable sum of money involved it would be prudent to get advice from a tax consultant anyway. There might be some interesting claimable deductions.

May SA's tax rates be more favourable than the UK ones

[Erichero]

Well, I phoned SARS efiling first and they didn't really know. Then I phoned the main SARS number for personal income tax and presented my problem.

I'm not sure he was entirely sure, but he said if it was an amount below R6000 then I didn't need to mention it on the form. My tax refund was R5000.

So I'm happy that I've pursued the right avenues, and if SARS don't want it back, I'm happy to keep it. Ehem, cough-cough

[Dave A]

Pleased to hear that. Make a note of who you spoke to though, just in case.

Just for the record on "questionable" tax issues, the best way to CYA is to get a tax directive.

[Erichero]

How do you go about getting a "tax directive"?

(I did note the time and date of the call to SARS - they record conversations supposedly, so that might help)

[Dave A]

Application for a tax directive is essentially a written application asking for a clear directive on how a particular piece of income or expenditure is to be handled for tax purposes. There are different types of directives with associated different forms.

I cruised the efiling site and there did not seem to be anything suitable. I would suggest you go to SARS and state that you are seeking a written tax directive on offshore income and need the appropriate application form.