You may have chosen a new life abroad, but as a South African emigrant there are several challenges you will face when it comes to moving your money offshore.
One thing many South African expats fail to consider is whether or not they may be the beneficiary of a South African estate. Indeed, it’s not something which we tend to discuss with our loved ones. For one, discussing such a sensitive topic reminds us of the fleeting nature of life, and our questions may come forth as pushy and inconsiderate.
But if you’re planning on emigrating, or have emigrated from South Africa, it’s important that you consider the logistics of moving funds from an inheritance abroad, and the same applies for transfers from trusts.
Regulations for trust and inheritance transfers
The rules of estate or trust transfers offshore depend on your status which will fall into one of three broad categories:
South African temporarily abroad
If you are only abroad temporarily, you can transfer your funds using your R10 million foreign investment allowance. You will need a tax clearance certificate and green barcoded ID book.
South African who has financially/formally emigrated
If you’ve emigrated financially, the transfer process is quite simple, and merely requires proof of your emigration status as well as your SARB (Reserve Bank) reference number. Your emigration needs to pre-date the testator’s death, however. The funds will be transferred via your blocked rand account.
Non-resident (non-South African citizen)
Of course, this third category is not something you as South African emigrant needs to concern yourself with.
Know your status
It may seem inconceivable, but South Africans who have been living abroad for several years often forget whether or not they financially emigrated when they first moved abroad. This holds especially true where individuals don’t receive regular income from South Africa, or have not managed any financial matters back home in a while.
Financial emigration doesn’t affect your South African citizenship in any way, but merely formalises your exit from South Africa for exchange control purposes. If you’ve been living overseas for a while and are looking to receive a South African inheritance, it may be a good idea to consider this step now. In addition to facilitating inheritance and trust transfers, financial emigration will also allow you to transfer your retirement annuity proceeds offshore before age 55 – something which could offer you a significant financial boost.
Discussing your South African inheritance options
Although this may be a sensitive topic, it’s a good idea to discuss a possible inheritance with your loved ones as this will help you to choose the best route for transferring your money abroad.
If you’re unsure about your financial status, or need assistance with your inheritance or trust transfers, feel free to talk to a finglobal.com consultant – we’ll call you.