“The recommendation of the [Davis Tax] committee was to undertake a review of offshore retirement funds which doesn’t necessarily mean anything will change,” he said.
Cowley, whose firm has an office in South Africa, adds that the DTC recommendations on are based on a “very small” number of domestic citizens making use of the government’s exchange control allowance, currently set at ZAR10m.
“The DTC’s issue isn’t international pension plans, it’s specifically pension schemes which they believe are set up as discretionary trusts rather than as a pension plan.
“What it [DTC] cares about is structures it doesn’t believe are pensions where there’s too much discretion available within them. Therefore, it’s looking at whether they should be taken out of that category and taxed as trusts and not as foreign pensions.
“They weren’t really saying let’s look at the pensions environment, they’re really saying ‘let’s look at some of these arrangement and determine whether they are a pension or not’,” he said.
