Given that most expats living overseas still have family back home, being an offshore beneficiary to a South African estate is inevitable for many at some point in the future.

With this in mind, let’s take a look at a few common scenarios to explain exactly what is necessary to transfer South African inheritance money overseas, depending on the circumstances.

Receiving your South African inheritance overseas

If you live abroad and you are the beneficiary of an inheritance from a South African estate, you fall into one of the following categories from an exchange control perspective.

1. South African resident temporarily abroad
2. South African who is a non-resident for exchange control purposes
3. South African who is a non-resident for tax purposes
4. Non-resident because you left South Africa as a minor
5. Non-resident foreigner, because you never resided in South Africa

If you formally emigrated from South Africa through the South African Reserve Bank (SARB) before 1 March 2021 (becoming a non-resident for exchange control purposes) or you ceased to be a resident for tax purposes with the South African Revenue Service (SARS), you will not be classified as a South African resident temporarily abroad, which makes the process of transferring inheritance funds overseas more straightforward for you, with the added benefit of not having to declare your worldwide assets to SARS when transferring money abroad.

If you are a South African who did not complete formal emigration through SARB, nor have you yet undertaken tax emigration through SARS, you are technically still considered a South African resident temporarily abroad for exchange control purposes.

Transferring inheritance money from South Africa:

Scenario 1: Receiving an inheritance as a non resident for tax purposes

• Tanya Smith is 52 years old and has lived down under in Australia for the past 10 years.
• She completed tax emigration from South Africa in 2022, and has received her SARS Non-Resident Confirmation Letter, meaning she has ceased her tax residency.
• Sadly Tanya’s mom passed away in South Africa earlier this year and Tanya is now the sole beneficiary of her estate.

How does Tanya go about transferring her inheritance from South Africa?

Since Tanya has tax emigrated, she is regarded as a South African tax non-resident. This means that she must:

1. Open a South African non-resident bank account, since her inheritance can only be paid into a local bank account that is in her name.
2. As soon as her inheritance is paid into that account, she can transfer the money out of South Africa into her offshore bank account. There is no limit to the amount of money she can transfer overseas.

Scenario 2: South African tax resident temporarily abroad

• Jaco Viljoen is 45 years old and has been living in the United Kingdom for the past 4 years.
• Jaco has never formally emigrated from South Africa nor ceased his tax residency with SARS.
• His parents passed away, and he is now one of three overseas beneficiaries to their estate.

How must Jaco go about transferring his inheritance from South Africa?

Since Jaco has never formally emigrated or tax emigrated from South Africa, he is regarded as a South African resident temporarily abroad. This means he must:

1. Ensure that he has a South African bank account in his name into which the inheritance money can be deposited.
2. Depending on the amount of money to be transferred, Jaco needs to do the following:

• If the amount is under R1 million: Jaco can use his single discretionary allowance (SDA) to transfer it offshore.
• If the amount is more than R1 million: (but less than R10 million) Jaco must apply for an Approval of International Transfer (AIT) Tax Compliance Status Pin from SARS to transfer money offshore, by means of his Foreign Capital Allowance.
• If the amount is more than R10 million: Jaco must apply for an Approval of International Transfer (AIT) Tax Compliance Status PIN from SARS and then obtain approval from SARB to transfer money offshore using his Foreign Capital Allowance.

It is important to note that if Jaco wants to transfer inheritance money of more than R1 million out of South Africa, he will have to declare his worldwide assets to SARS.

How much money can you transfer from South Africa?

Read all about the South African exchange control limits and allowances.

Do I need SARS tax clearance to transfer my inheritance out of South Africa?

If you are a South African resident temporarily abroad, you will need to receive the go-ahead from SARS if the amount exceeds the Single Discretionary allowance amount and you wish to transfer more than R1 million abroad.

FinGlobal: cross-border financial specialists for South Africans abroad

Need a hand navigating the complexities of the South African exchange control and tax compliance rules? FinGlobal is a name you can trust. We can help you simplify the process of claiming your South African inheritance, and moving the proceeds abroad. Need a South African non-resident bank account? We can assist! Need to cease your tax residency with SARS? Let us help! To get started with FinGlobal, leave your contact details in the form below and we’ll be in touch to discuss your requirements.