High-Wealth Individuals (HWIs), defined by the South African Revenue Service (SARS) as individuals with gross assets of R75 million or more, play a significant role in South Africa’s tax base. Although they represent a small proportion of taxpayers, their income, investment activity and asset holdings contribute materially to national revenue.
“In South Africa, a relatively small group of taxpayers contributes a substantial share of total tax collections,” says Morné Janse van Rensburg, Managing Director of Hobbs Sinclair Advisory. “This concentration explains why SARS has formalised its engagement with high-wealth taxpayers and applies a more structured compliance approach to this segment.”
Personal income tax biggest contributor
In the 2024/25 fiscal year, SARS collected approximately R1.9 trillion in net tax revenue, a 6.6 % increase on the previous year. Personal Income Tax remained the largest contributor, accounting for close to 40 % of total collections. Recent data shows that roughly 7.3 % of taxpayers contribute nearly 48.6 % of all personal income tax, underlining the reliance on high-income and high-asset individuals.
SARS responded to this concentration by establishing the High-Wealth Individual Unit (HWIU) in April 2021, in line with international revenue authority practice. The unit focuses on taxpayers with complex financial affairs, including those with:
- Multiple local and offshore income streams
- Trust, corporate and family ownership structures
- Cross-border investment portfolios
- High-value property and luxury assets
- Significant discretionary and lifestyle-related spending
Expanding disclosure requirement
“High-wealth taxpayers typically operate across several structures and jurisdictions,” Janse van Rensburg explains. “From SARS’s perspective, that complexity requires closer monitoring and more detailed engagement to ensure tax positions are accurate and consistent.”
As part of this approach, SARS has expanded disclosure requirements. Taxpayers with assets of R50 million or more are now required to submit a high-level balance sheet reflecting local and foreign assets and liabilities. This marks a shift towards assessing overall wealth rather than relying solely on annual income declarations.
“This change indicates that SARS is looking at the full financial picture,” says Janse van Rensburg. “Asset growth, offshore exposure and structural arrangements are increasingly reviewed alongside reported income.”
Offshore in focus
Through international information-exchange agreements and enhanced data-matching capabilities, SARS is increasingly able to identify undisclosed offshore assets. The tax authority has indicated that around 2 800 South Africans with assets exceeding R50 million collectively hold an estimated R150 billion offshore, underscoring the importance of accurate disclosure.
The HWIU operates through a relationship-management model. Qualifying individuals are assigned a dedicated SARS Relationship Manager to coordinate compliance across multiple tax types, manage queries and facilitate consistent engagement.
“Relationship management does not replace enforcement,” Janse van Rensburg notes. “It reflects an expectation that high-wealth taxpayers engage properly, respond timeously and maintain defensible tax positions.”
Expert input essential
Given the complexity of wealth structures and evolving SARS requirements, HWIs are generally advised to work with both accounting specialists and tax attorneys. This coordinated approach supports:
- Accurate and consistent tax filings
- Appropriate structuring of trusts, companies and offshore holdings
- Effective procedural and legal engagement with SARS
- Reduced risk of disputes escalating unnecessarily
“Sometimes a tax issue is not an accounting problem, but a legal or procedural one,” says Janse van Rensburg. “That’s where accountants and tax attorneys working together can engage SARS effectively and resolve matters efficiently.”
As SARS continues to refine its compliance frameworks and data capabilities, expectations around transparency and alignment remain high. For high-wealth individuals, understanding how SARS assesses total wealth — not just taxable income — is central to managing compliance risk.
