EP06: Overseas? Here’s How to Avoid 45% Tax Pain on Your Trust Distributions

If you’re a South African entrepreneur working abroad or planning to this episode is essential listening. Nicole and Wayne unpack the tax minefield of foreign income, dual residency, and what happens when SA trusts start distributing to non-residents. From the overlooked impact of the Double Tax Agreement between South Africa and France to the jaw-dropping 45% tax on trust payouts, this conversation is a masterclass in cross-border compliance.

For high-performing founders making moves internationally, this episode offers a sobering reminder: tax residency changes everything—and ignorance can cost you dearly.

📌 Three Key Takeaways:

1. The 1.25M Myth: Many believe that earning under R1.25 million abroad keeps them safe—but that only applies if you remain a South African tax resident. Change your tax status, and everything shifts.
2. The Double Tax Agreement is Your Trump Card: If you qualify as a French tax resident under the DTA’s tie-breaker rules, SA loses taxing rights on your employment income but not on SA-based assets or trust distributions.
3. Trust Distributions Can Trigger Double Tax: Effective March 2024, distributions to non-resident beneficiaries are taxed at 45% by the trust in SA—with no credit available to the beneficiary in France. Add another ~30% tax in France, and you could lose 75% of your payout.

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