New British Tax Rebates for South Africans Living in the UK

Changes to British tax laws in April 2006, will enable South Africans working in Britain to buy property in their home country at tax discounts of up to 40%.

Cape Town (PRWEB) November 26, 2005 -- The new system allows any person paying British tax to invest tax-deductible funds of his or her choice into self-invested personal pensions (Sipps). A whole year’s income may be invested this way and the money used to buy property or other assets in South Africa. All rent earned from the property will be tax-free.

An estimated 750,000 South Africans –most of them between 20 and 30 years old – live in London alone and will stay for an average of about five years. It is expected that the new tax incentive will encourage a large number of them to buy property in South Africa. When they return to South Africa they will have a tax-sheltered offshore trust to which they will be able to contribute until they are 55, if they reach this age after 2010.

Tax experts explained that the law is being changed because the British government, like other European governments, is concerned about the increasing pension burden it will be facing as people reach a higher age. The new system will enable more people to be independent when they retire.

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