As a South African emigrant (or someone considering emigration) you may be wondering what your options are for moving your money between different countries. After all – it’s hard to know what your rights are and what the respective jurisdictions will allow.
There are various options available to you though and in some instances you may enjoy a financial benefit by moving your money around.
Managing your cross-border finance – what are your options?
Retirement annuity transfer
You can transfer the proceeds of your retirement annuity offshore to reinvest or foot your bills, whatever your age. In order to do so, you will need to emigrate financially – this simply changes your status for exchange control purposes to ‘non-resident’ in South Africa. It doesn’t affect your South African citizenship in any way.
Pension and preservation fund transfer
South Africans can transfer their pension or preservation funds offshore before age 55 without financial emigration. In some instances you may even stand to benefit greatly from such a transfer should you reinvest your savings in your foreign pension. The UK, for instance, offers a pension incentive to foreign nationals which could potentially increase the value of your retirement fund.
If South Africa has a Double Taxation Agreement with the country you have moved to, you may also be able to reduce or even eliminate the tax paid in South Africa when you make a withdrawal from your pension. These agreements are in place to ensure that South Africans aren’t disadvantaged through taxation in both countries.
The easiest way to move your money abroad is via your exchange control allowances. By using your annual discretionary (R1 million) or foreign investment (R10 million) allowances, or a combination of both you are free to transfer up to R11 million to your new home each year, for any legal purpose.
Using your South African credit or debit card abroad
Whether or not you are allowed to use your South African credit or debit card abroad depends on how long you’ve been there and how long you remain. South Africans are allowed to use their South African bank cards during their temporary overseas travel. If you have moved overseas permanently, however, you will only be able to use your cards in the calendar year of departure from South Africa. Unfortunately South African banks aren’t efficient in monitoring this usage or applying SARB and SARS rules, so this is something you will need to manage yourself. Claiming ignorance is no defence and a breach of the rules could result in a lot more than a slap on the wrist.
Life and living annuities
Life and living annuities are re retirement investment products which offer you an income from your retirement savings, with slight differences. There’s not much you can do with these annuities once you’ve emigrated. Though policy surrender is possible in some cases, it is only allowed if the policy values fall below specific thresholds.
Talk to finglobal.com about your options
If you are wondering what your options are, simply leave your details and we’ll contact you for an obligation-free consultation. finglobal.com offers a solution based approach and can move your funds between countries quickly, at the most competitive exchange rates.