Just because you’re not planning on emigrating from South Africa any time soon, doesn’t mean that your finances have to remain in the country. You can still move your money offshore, as long as you are mindful of the two exchange control annual limits that apply when transferring money out of South Africa. The South African Reserve Bank (SARB) makes two allowances available to South Africans on an annual basis; namely the Single Discretionary Allowance and the Foreign Capital Allowance (also referred to as the Foreign Investment Allowance). Let’s take a look at what each allowance entails, as well as the basic requirements associated with utilising these exchange control allowances to transfer money from South Africa.
Transferring money out of South Africa: know your limits
As a South African individual, you can utilise both allowances to collectively transfer R11 million out of the country per year.
The Single Discretionary Allowance (SDA): This is a yearly allowance of up to R1 million for each adult South African resident (above 18 years old) to transfer money out of South Africa.
- The SDA can be used for a variety of legal purposes abroad (hence ‘discretionary’ allowance) and it is your choice how to use it.
- To use this allowance, you’ll need to provide a valid South African identity document (green bar-coded South African identity document or a Smart identity document card) to the Authorised Dealer handling your international transfer for the purposes of compliance with FinSurv Reporting requirements.
- It is not necessary to obtain a Tax Compliance Status (TCS) PIN from SARS before using this allowance.
However, the Single Discretionary Allowance is available to South African residents only. Private individuals who have ceased their tax residency are granted the facility to transfer up to R1 million overseas as a travel allowance in the same year that they became tax non-residents, without the need to obtain a TCS PIN beforehand. This is a once-off allowance that cannot be used again, and non-residents do not qualify to use the SDA once they have ceased tax residency.
The Foreign Capital Allowance: This allowance gives South African individuals the opportunity to transfer up to R10 million offshore annually.
- Where previously individuals would have to apply for a TCS PIN in respect of “Foreign Investment Allowance” in order to use this allowance, SARS has recently updated this to the Approval for International Transfer” (AIT) application.
To use the Foreign Capital Allowance, you must submit the following supporting documentation when making an application for Approval of International Transfer:
- Documents that confirm the source of the capital to be invested/transferred offshore.
- A detailed statement of assets and liabilities (local and foreign) covering the past three tax years.
- Specific details relating to locally-listed securities, where relevant.
- Proof of power of attorney, where the TCS application is submitted on your behalf.
As such, before making your TCS application to obtain approval for an international transfer out of South Africa, you should ensure:
- You have no outstanding income tax returns.
- You owe no debt to SARS, or you have made arrangements to pay your debt.
- You are registered for the different tax types that are relevant to you.
- Your registered personal details are current.
- You have no duplicate tax reference numbers.
How to move money out of South Africa if you are a non-resident
If you have already completed financial emigration a number of years ago or you have ceased to be a tax resident of South Africa, you will need to provide your Non-Resident Confirmation Letter from SARS when applying for approval of an international transfer in order to move your remaining assets out of South Africa. There is no limit to the amount of money a non-resident can move out of South Africa, provided you can verify the source of your funds legitimately. You will require prior approval from the South African Reserve Bank (SARB) where the amount exceeds R10 million.
FinGlobal: cross-border financial specialists for South Africans
Whether you’re looking to use your Single Discretionary Allowance, or Foreign Capital Allowance to transfer money out of South Africa, FinGlobal can assist. We can make sure you follow all the correct procedures, supply the necessary supporting documents and facilitate the transaction once approval for your international transfer has been granted by SARS and/or SARB, as the case may be. If you are already living outside of South Africa and you wish to transfer your remaining emigrant assets (such as your retirement annuity funds) out of South Africa, we can help make that happen, too.
To speak to us about our cost-effective, safe international money transfer service from South Africa, leave your contact details in the form below and we’ll be in touch to discuss your specific money moves. Alternatively, you can send an email to email@example.com with all your financial and tax emigration questions.