One of the most important aspects of preparing for your overseas relocation is your financial planning. Although South African exchange control rules have relaxed considerably, making it much easier to transfer money out of South Africa, it’s still important to know what to expect. We compiled this guide to repatriating money from South Africa to make it easier for you when it comes to dealing with the South African Revenue Service (SARS) and Reserve Bank (SARB).
How much money can you take out of South Africa when emigrating?
The rules for emigrants on repatriating money out of South Africa are contained in the Currency and Exchanges Manual for Authorised Dealers, specifically Section B.2(J) which applies expressly to individuals who have ceased tax residency. This section also applies now to individuals who formally emigrated through the South African Reserve Bank approval process before 1 March 2021.
What do you need to know about international money transfers from south africa
While resident and non-resident individuals are treated the same for practical exchange control purposes, the distinction between South African resident assets and non-resident assets still stands.
Authorised Dealers (i.e., your local commercial bank) can allow the transfer of assets and money abroad as long as an individual has:
- Ceased to be a tax resident in South Africa/formally emigrated via SARB;
- Obtained a Tax Compliance Status (TCS) for “emigration” from SARS; and
- Is compliant with SARS when this TCS is verified.
In the same year that you cease to be a tax resident, you are allowed to transfer (by means of an Authorised Dealer) up to R1 million as a travel allowance (to cover your moving expenses etc.) without getting a TCS PIN letter from SARS. You can only use this allowance once.
You may move household and personal belongings to the value of R1 million per family unit under a SARS Customs Declaration form, essentially exporting your belongings out of the country within the same year that you cease to be a tax resident. These assets must be declared on the necessary forms, and such transactions will be treated like cash.
Along with these transfers, an Authorised Dealer can enable the transfer of a total amount of up to R10 million per calendar year per private individual who has ceased tax residency/formally emigrated via SARB, as long as that individual:
- Is over the age of 18
- Is tax compliant
- Submits the necessary TCS Application for verification.
To transfer more than R10 million out of South Africa, a stricter verification process will be applied by SARS. after which it is necessary to seek approval from the SARB Financial Surveillance Department (FinSurv). Such transfers will trigger a risk management test that involves verification of the tax status and the source of funds to be moved out of South Africa. The individual will be assessed according to anti-money laundering and countering terror financing requirements, in line with the Financial Intelligence Centre Act of 2001.
When seeking to transfer more than R10 million out of South Africa, the application to FinSurv will require a TCS PIN letter that contains the tax number and TCS PIN to verify the individual taxpayer’s compliance status, while confirming the amount to be transferred. To transfer any additional remaining assets after the expiry of the TCS – Emigration, it will be necessary to complete a TCS application in respect of Foreign Investment Allowance (FIA). This will also be required for individuals who formally emigrated via SARB before 1 March 2021.
Tips for repatriating money from South Africa
- Under the TCS system, a TCS PIN letter will be issued to the South African residents who cease to be residents for tax purposes that will contain their tax number.
- Authorised Dealers must use the TCS PIN to verify the applicant’s tax compliance status via SARS eFiling before any money can be transferred out of South Africa.
- Where an individual ceases tax residency and has a total remaining cash balance that is less than R100 000, it is possible to have this money sent abroad without obtaining clearance from SARS first.
FinGlobal: Best way to make an international money transfer from South Africa
Looking for a reliable, trustworthy financial services provider to handle your emigration financial planning? FinGlobal can assist you with the transfer of your money from South Africa, in a safe and cost-effective manner. We can help with all aspects of your financial relocation, including tax clearance, retirement annuity withdrawal, tax emigration, and foreign exchange. To see how we can help make your international financial transition easier, leave us your contact details and we’ll be in touch!