Business Maverick

ESTATE PLANNING

Your South African will and testament might not adequately address offshore assets

Your South African will and testament might not adequately address offshore assets

Specific tax considerations may apply to your offshore assets and may be governed by the tax laws of the foreign jurisdiction where the assets are located, in addition to South African tax laws.

With families distributed across the globe, people working remotely, and choosing to retire abroad, the nuances of your will take on a new dimension. 

The reality is that even if you fall in the 30% of South Africans who have been financially responsible in drawing up a will, this may not comply with the legal requirements of other jurisdictions.

And you may need more than one specialist adviser to help you navigate this minefield. Instead of just one financial planner, you may also need a specialist estate planner and a tax specialist.

Rone Silke, a consultant at Sovereign Trust, says that if you have offshore property or business interests that form part of your estate, it’s in your best interest to work with a professional who specialises in offshore estate planning and to draft separate wills to protect those assets in terms of the applicable laws in the countries in which you reside.  

Offshore intricate details

“A good estate planner will advise on legalities – formalities like witnessing and signing requirements, age restrictions, and any content specifications – that are different from those applicable in South Africa,” she says, adding that your planner should be able to advise on country-specific language and translation technicalities. 

If a will is written in a language other than the official language of the country in question, it may be necessary to have it translated.

Tax considerations

Laws governing inheritance, succession and taxation may vary from South African tax legalities. Specific tax considerations may apply to your offshore assets and may be governed by the tax laws of the foreign jurisdiction where the assets are located, in addition to South African tax laws.

“Inheritance, capital gains and other taxes could impact your beneficiaries when your estate is being wound up. Understanding the tax structures in your investment destinations, both before investing and while drawing up your will, is a crucial aspect of maximising your return on your investments,” says Silke.

She advises that depending on the nature and size of your offshore investments, it may be advisable to engage in tax planning and structuring. 

“By putting tax-efficient investment structures like trusts, companies and investment funds in place, you will be better able to minimise the impact of taxes on your investments and assets, as well as on your legacy.” 

Working with a tax professional will also help you to benefit from double tax agreements (DTAs), which aim to provide relief from the potential double taxation of income and assets between countries. 

DTAs ensure that income and assets are not taxed twice – once in the country where they are earned or located and again in the country where the taxpayer is a resident.

The requirements for a valid will

What you need for a valid will

There are simple requirements for your will to be recognised as valid:

  • You must be 16 years or older.
  • You must be mentally competent and able to understand the consequences of creating a will.
  • The will must be in writing.
  • Two people older than 14 years of age must witness the making of the will. These witnesses cannot also be beneficiaries of the will.
  • You must initial every page and sign the last page of the will, in the presence of the witnesses.
  • The witnesses must initial every page as well as sign the last page of the will.
  • It is important that your will is correctly dated to avoid any confusion if you have drawn up more than one will in your lifetime. The most recent will at the time of your death supersedes any previous wills you may have drawn up. DM
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Comments - Please in order to comment.

  • Preeth Singh says:

    Dear Ms Moodley thank you for a well structured article on estate planning and will Two comments though
    1 in addition to the age requirement, the witnesses must not incompetent to give evidence in court
    2 witnesses to a will are not barred from inheriting if they can show that they did not unduly influence the testator and that they did not commit fraud
    Thank you

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