If you’ve recently had a loved one pass away, there’s a chance that there’s an inheritance waiting for you back in South Africa. Death isn’t something that people like to talk about, but it’s important to know exactly what to expect when it comes to dealing with claiming your inheritance money back home as a South African non-resident and getting it transferred abroad. Exchange control regulations can be tricky, so it’s best to be prepared.
How to claim inheritance money in South Africa
There’s a silver lining in every storm cloud, and although your family member has sadly passed on, they’ve left you a little something to remember them by. As the beneficiary of a South African will or trust living abroad, you’ll need to think carefully about your exchange control status. Unless you know exactly what you’re getting yourself in for there is a chance that payments due to you from a trust or inheritance might not be carried out unless you make a retrospective application to the South African Reserve Bank and even so, there’s no guarantee that you’ll get the approval you need to cash in your inheritance.
What do you need in order to claim your South African inheritance if you’re living overseas?
According to South African exchange control rules, as the beneficiary of an inheritance living overseas, there are three possible ways it can play out in terms of how to claim your inheritance money:
1. If you are a South African resident temporarily abroad (in other words you have not yet emigrated financially):
- You can transfer your inheritance money abroad by making use of your foreign investment allowance, for which you will need your South African identity document and SARS tax clearance.
- You can formalise your emigration with the Reserve Bank, which makes it much easier to transfer your inheritance money abroad.
2. If you have already financially emigrated and the South African Reserve Bank considers you a non-resident for financial purposes:
- Exchange control regulations aren’t as strict for non-residents, so you’ll just need to provide your SARB reference number or proof of your emigration, which you would have received when you formalised your emigration.
3. If you were never a South African citizen because you were born overseas, but you’ve inherited money from family in the Republic:
- All you need to do to get the transfer authorised is to provide proof that you are not a South African resident for exchange control purposes.
Will you be taxed on your inheritance back in South Africa?
No, you will not be liable to pay inheritance tax on your money. Assets received by inheritance are not subject to tax because SARS classifies an inherited asset as a capital receipt, which means that it doesn’t fall into your gross income as a taxpayer. Nor is this inheritance subject to capital gains tax (CGT) as all applicable taxes would have been taken care of by the deceased estate in the form of estate duty. Roughly around 20% for estates worth more than R3.5 million, once this levy has been settled with SARS there is no longer any tax due.
How long does it take to receive my inheritance money from South Africa?
As with all legal proceedings and anything bureaucratic, the timeline to completion and pay out is rarely as quick as you would like. It is possible that it can take anywhere from six months (if the planets and stars are correctly aligned) to several years to wrap up a deceased estate. Timing depends on the structure and size of the deceased’s estate, as well as the complexity of their assets and liabilities. Delays can be caused by the lack of a will, outstanding tax returns or missing paperwork. The right cross-border inheritance specialists can speed things up for you, sorting out any issues and handling all the stress on your behalf.
FinGlobal: Financial services for South African expats
Unsure about your financial emigration status? Things can get complicated from an exchange control perspective if you’re a South African living abroad, so it’s advisable to get some assistance from the experts. Especially during this stressful time, it’s best to get objective advice on how to handle claiming your inheritance money from South Africa if you’re living overseas.
At FinGlobal, our people are trusted cross-border inheritance experts – legal, financial and tax specialists in South Africa. We’re here to ensure you can access your South African inheritance from anywhere in the world. We’re ready to take care of all the paperwork for you, during this difficult time and we’ll handle every administrative hurdle in getting your money transferred from South Africa and hold your hand every step of the way.
In addition to helping with your South African inheritance, FinGlobal is also ready to guide you through cashing in your retirement annuity, exiting the South African tax system, emigrating financially, tax clearance, foreign exchange, and more.