As the recipient of a South African inheritance, there are a number of things to be aware of from an exchange control and tax perspective before you will be able to get your hands on your inheritance money. We’ve compiled this handy guide to walk you through what you need to know and how to claim inheritance money in South Africa.
According to the South African exchange control regulations, if you live overseas and you have an inheritance due to you from a South African estate, you fall into one of three categories:
- South African resident temporarily abroad
- South African who has formally emigrated/tax emigrated
- Non-resident of South Africa/foreigner
How to claim inheritance money in SA if you are a South African resident temporarily abroad
Who is a South African resident temporarily abroad?
- This means that you have not relocated abroad permanently, and you intend to go home to South Africa at some point in the future. You are still considered a tax resident by the South African Revenue Service (SARS).
Most people fall into this category. Here, your options are simple. You can transfer up to R1 million of your inheritance overseas using your Single Discretionary Allowance. For transfers above R1million you can avail of your foreign investment allowance. To do this, you will need a tax clearance from SARS and your green South African ID book or Smartcard.
How to claim inheritance money from SA if you are a formal emigrant
Who is a formal emigrant?
- This means that you completed the process of formalising your emigration from South Africa before 1 March 2021, by means of the approval process with the South African Reserve Bank (SARB).
- In completing this process, you became a non-resident for exchange control purposes.
How to claim inheritance money from SA if you are a tax emigrant
Who is a tax emigrant?
- This means that you have completed the process of tax emigration through the SARS after 1 March 2021.
- In completing this process you became a non-resident for tax purposes.
While the processes might have different names – formal emigration and tax emigration – essentially the outcome is the same. You are no longer treated as a South African resident, whether from an exchange control or tax perspective. However, when you live outside South Africa and you inherit from a South African source, it is necessary to ensure that your emigration has been placed on file (noted by either SARB or SARS) in order to get your hands on this inheritance.
- As a South African expat, you must show proof that you are no longer resident for tax purposes, and that you are compliant with SARS in order to access your South African inheritance from overseas.
- To be noted as a non tax resident, you will have to go through a formal declaration process with SARS in terms of which you assert and prove your non-resident status based on the qualifying criteria from SARS.
- South African inheritance funds can only be transferred overseas if you can provide confirmation of your emigration – this involves providing a South African Reserve Bank reference number or approval which you would have received if you emigrated before 1 March 2021. After this date, you will need to provide a letter confirming non-resident status from SARS.
How to claim an inheritance in SA if you were never a South African resident/citizen:
All you have to do is provide proof of your non resident status, and you will be able to access your money and transfer it overseas.
Is there an inheritance tax in South Africa for non residents?
There is no inheritance tax on the individual in South Africa but the inheritance must still be declared to SARS, whether you are a tax resident or a tax non resident.
FinGlobal: cross-border financial specialists for South African expats
How long does it take to get inheritance money in South Africa? The timeline to completion and payout can take anywhere from six months to several years. Wrapping up a deceased estate can get complicated, depending on the size and structure of the estate. For assistance in claiming your South African inheritance from overseas, leave us your contact details in the form below and we’ll be in touch soon!