Document checklist for transferring an inheritance from South Africa

The idea of receiving a windfall via inheritance from South Africa is great, in theory. Until you get to the practical part and you have to deal with the paperwork and red tape involved in getting your hands on your money. If this is something you’ve been dreading, we have good news! As of March 2021, transferring inheritance money out of South Africa is much easier than before, no matter where in the world you now live. This is because residents and non-residents are now treated equally from an exchange control perspective, making the process more streamlined.

There are, however, some tax considerations to be aware of, depending on your tax residency status, which will influence the supporting documentation you need to provide to facilitate the transaction so it’s a good idea for you to be aware of these factors before you start the process of transferring your South African inheritance overseas.

Are you an expat living abroad with an inheritance claim in South Africa?

Since March 2021, transferring money out of South Africa has been made easier for both residents and non-residents. However, specific restrictions apply to large transfers and high-risk transactions. Below is a basic document checklist that outlines the process for transferring your inheritance offshore, considering your tax residency status and the amount inherited.

By following these steps and gathering the necessary documents, you can efficiently transfer your funds abroad.

Steps for transferring an inheritance overseas from South Africa:

1. Determine your tax residency status:

• Resident: You haven’t completed tax or financial emigration and have a valid South African ID.
• Non-resident: You have completed tax or financial emigration or lack a valid SA ID.

2. Gather documents based on your tax residency status:
Resident:

• Death certificate
• Last Will and Testament
• Liquidation and Distribution Account (if total estate assets exceed R250,000)
• Letter of Executorship
• Proof of inheritance source/letter of inheritance (may be requested by the bank)

Non-resident:

• All documents listed above
• Proof of emigration (SARB reference number or SARS Non-Resident Confirmation Letter)

3. Apply for tax clearance from South African Revenue Service (SARS) (if transferring over R1 million) – this is known as Approval – International Transfer (AIT) clearance, which has its own paperwork requirements.

4. Apply for South African Reserve Bank (SARB) FinSurv approval (if transferring over R10 million).

5. Open a Non-Resident Bank Account:

• This account will receive your transferred funds, after which your money can be remitted abroad.

6. Present documents to an Authorised Dealer (local bank):

Banks might ask for extra documentation to confirm the source of your inheritance. They will process the transfer according to your tax residency status and the amount inherited. If the total assets of the deceased resident’s estate are below R250,000, the inheritance funds for non-resident individuals can be sent overseas without hassle. However, the bank managing the transfer will require the Last Will and Testament and Letter of Executorship or Authority along with proof of source documents, such as a copy of Final Liquidation and Distribution account stamped and signed by the Master of High Court.

How do you get your inheritance money out of South Africa?

• If you live abroad and you are still a South African tax resident with a valid green bar-coded South African ID or a Smart identity document card you can use your Single Discretionary Allowance of R1 million or Foreign Investment Allowance of R10 million to transfer your money out of South Africa.
• If you no longer have a South African ID, you will need to complete the process of tax emigration to have your tax residency status confirmed as non-resident.

Is there an inheritance tax for non-residents in South Africa?

There is no inheritance tax payable in South Africa for non-residents. The executor of the deceased estate is responsible for handling the tax liability, which is usually paid out of the estate. However, you might be required to pay tax on your inheritance in the country where you are now resident, unless there is a double taxation agreement between South Africa and that country.

Read more: The Lowdown on Inheritance Tax in South Africa.

FinGlobal: cross-border financial specialists for South African expats

If you need assistance with handling an inheritance claim back in South Africa, FinGlobal can assist you to navigate all the paperwork and red tape. From confirming your tax residency status, to tax clearance and international money transfers from South Africa, we can handle the entire process from start to finish, on your behalf.

To learn more about our trusted, convenient cross-border inheritance services, please leave your contact details below and we’ll be in touch to discuss your requirements.