As a South African resident, you have the option to move your finances offshore through the use of two exchange control allowances provided by the South African Reserve Bank (SARB): the Single Discretionary Allowance and the Foreign Capital Allowance. These annual limits serve as a guideline for individuals looking to transfer money out of South Africa.
The Single Discretionary Allowance: Utilising your discretion
The Single Discretionary Allowance (SDA) allows each adult South African resident, above 18 years old, to transfer up to R1 million per calendar year out of the country. This allowance is considered ‘discretionary’ as it can be used for a variety of legal purposes abroad, giving individuals the freedom to choose how they use this allowance.
When using the SDA, you must provide a valid South African identity document (either a green bar-coded ID or Smart identity document card) to the Authorised Dealer handling your international transfer. This is necessary for compliance with FinSurv Reporting requirements. Unlike with other allowances, obtaining a Tax Compliance Status (TCS) PIN from SARS is not required before utilising this allowance.
However, it’s important to note that the Single Discretionary Allowance is only available to South African residents. Non-residents who have ceased their tax residency in South Africa are given a once-off Travel Allowance of up to R1 million in the same year that their tax residency status changes. After this, they are not eligible to use the SDA.
The Foreign Capital Allowance: Transferring larger amounts
The Foreign Capital Allowance allows South African individuals to move up to R10 million offshore annually. This amount was previously known as the “Foreign Investment Allowance”, but SARS has recently changed this terminology to “Approval for International Transfer” (AIT).
When applying for approval of an international transfer, it’s important to submit relevant documentation, including proof of capital source and a detailed statement of assets and liabilities (both local and foreign) from the past three tax years. If you have locally-listed securities, additional information may be required. It’s also important to note that if someone else is submitting an application on your behalf, proof of power of attorney must be provided.
Before making your TCS application for approval of an international transfer, ensure that all outstanding income tax returns are completed and any debts owed to SARS have been resolved or arranged for payment. Additionally, check that you are registered for any relevant tax types and that your personal details are up-to-date with the correct tax reference number.
Moving money out of South Africa as a Non-Resident
If you are no longer a tax resident of South Africa or have completed financial emigration, you will need to provide a Non-Resident Confirmation Letter from SARS when applying for approval of an international transfer. As a non-resident, there is no limit to the amount of money you can move out of South Africa as long as you can verify that the funds were obtained legitimately. However, if the amount exceeds R10 million, prior approval from SARB is required. It’s important to note that this same allowance applies to individuals who are not citizens or permanent residents of South Africa.
FinGlobal: cross-border financial specialists for South Africans
Whether you’re looking to use your Single Discretionary Allowance, or Foreign Capital Allowance to transfer money out of South Africa, FinGlobal can assist. We can make sure you follow all the correct procedures, supply the necessary supporting documents and facilitate the transaction once approval for your international transfer has been granted by SARS and/or SARB, as the case may be. If you are already living outside of South Africa and you wish to transfer your remaining emigrant assets (such as your retirement annuity funds) out of South Africa, we can help make that happen, too.
To speak to us about our cost-effective, safe international money transfer from South Africa, leave your contact details in the form below and we’ll be in touch to discuss your specific money moves. Alternatively, you can send an email to info@finglobal.com with all your financial and tax emigration questions.