Moving abroad is a huge step, and while it’s undoubtedly thrilling beyond belief, there’s that little thing called money to think about, right? One of the top priority aspects of planning for your emigration is plotting out the most cost-effective, time-efficient and compliant route to moving your money out of South Africa. Although things have eased up considerably with exchange control regulations, it’s still important to know what you’re doing and what to expect. The last thing you need is to be cut off from your finances in a foreign country!

To avoid such an unthinkable scenario, we will walk you through what you need to know about moving money out of South Africa once you’re a non-resident for tax purposes. Think of us as your friendly guide, ensuring your finances are sorted so you can focus on settling into your new life overseas.

Tax emigration from South Africa: understanding what your non-resident tax status means

If you’ve already made the big move or are about to, you’ve likely heard about becoming a ‘non-resident for tax purposes.’ What exactly does that mean? This means that for the South African Revenue Service (SARS), you’re no longer seen as a tax resident in South Africa. Think of it like this: you’re telling SARS that your tax ‘home’ is now elsewhere and that they should no longer tax you on your worldwide income.

It’s not just saying, “Bye, I’m gone!” and disappearing over the horizon. You must officially tell SARS you’re exiting the South African tax system. This is called “tax emigration” or “ceasing South African tax residency.” It involves several steps, like submitting certain forms and proving you’ve genuinely moved your life elsewhere without the intention to return. It’s essential to get this right because you’ll still be considered a South African tax resident without it, even if you’re living overseas.

Read more: Tax emigration – how to become a non tax resident of South Africa

Why is this non-resident tax status so important? Well, it makes a huge difference when managing your money internationally from an exchange control perspective. Once you’re officially a non-resident (in other words, you’ve completed tax emigration from South Africa), you generally have more freedom to move funds in and out of the country. This makes handling your finances in your new country of residence much more straightforward.

Read more: The dangers of not completing tax emigration after you leave South Africa.

One important thing to keep in mind is that banks and other financial institutions usually ask expats for proof of their non-resident status. This is generally in the form of a Non-Resident Confirmation Letter from SARS. Make sure you keep all your paperwork in order. That proof will make your life much easier when you need to make international transfers from South Africa or manage your accounts.

Read more: How and why to obtain a SARS Non-Resident Tax Status Confirmation Letter.

Moving money offshore from South Africa: understanding the rules

It’s natural to have many questions about transferring money from South Africa after your departure. Let’s tackle them individually, focusing on how your tax residency status in South Africa plays an important role.

First things first: Why does your tax residency matter so much?

Your tax residency determines which rules apply to your international money transfers. You can access specific exchange control allowances if you’re still a South African tax resident.

How much money can a tax resident move out of South Africa yearly?

You can use the Single Discretionary Allowance, which allows you to move up to R1 million annually without needing prior tax clearance from SARS. You’ll just need your valid South African ID to move money offshore this way. For larger amounts, there’s the Foreign Capital/Investment Allowance, enabling you to transfer up to R10 million per year, which requires you to submit an Approval for International Transfer (AIT) application to SARS. Combining these, as long as you remain a tax resident, you can move up to R11 million annually.

Read more:

• Understanding the limits of transferring money out of South Africa: The Single Discretionary Allowance vs the Foreign Capital Allowance.
• Six things SARS wants you to know about the limits on transferring money out of South Africa.

What changes when you become a non-resident for tax purposes? How much money can you take out of South Africa tax-free?

• After you cease your South African tax residency, you are no longer eligible to use the Single Discretionary Allowance, as this is strictly for residents.
• However, you will get a once-off travel allowance transfer of up to R1 million in that same year without needing a TCS PIN. This can only be used once.
• After using this allowance, all further transfers must be done using the SARS AIT process.
• After tax emigration, you will also be allowed to remit up to R100,000 as a one-off amount to wrap up your finances and close bank accounts.

Read more: How to get your money out of South Africa via SARS Approved International Transfer.

How much money can you take out of South Africa?

When physically departing from South Africa, you can declare and carry a maximum of R25,000 cash on your person. There is no limit on the foreign currency you can move with, and if you’re travelling within the Common Monetary Area, there is no cash limit either. After declaring them to SARS, you also export your personal belongings worth up to R1 million.
Read more:

• Leaving South Africa? Here is how to use the traveller declaration form.
• 7 Financial things you need to do before (and after) you leave South Africa permanently.

Now, let’s talk about the types of funds you’re going to be transferring offshore from South Africa:

Income: Funds from income sources like rental income, dividends, or pensions can be transferred without explicit SARS permission. However, you’ll need an annual Good Standing Tax Compliance Status (TCS) PIN from SARS.

Capital: Funds from capital sources, such as property sales, retirement annuities, or investments, require more scrutiny from SARS to ensure they’re not missing out on tax revenue. To facilitate this, you’ll need a TCS PIN for an Approved International Transfer (AIT) to move these funds, capped at R10 million per year.

For non-residents wishing to transfer more than R10 million, SARS has a more in-depth verification process that investigates the source of their funds. Approval must be sought from the South African Reserve Bank’s FinSurv division, which includes submitting to anti-money laundering and counter-terrorism financing checks.

Read more:

• Your SARS Tax Compliance Status – what expats need to know
• Steps to take if your SARS tax compliance status shows as “non compliant”

Top tips for moving money offshore from South Africa

1. When executing international money transfers, it is essential to choose a forex service provider that fully understands the implications of tax, legal, and exchange control.
2. For the AIT process, you’ll need your SARS Non-Resident Confirmation Letter and a Non-Resident Bank Account. FinGlobal can assist you with all of the above.
3. Ensure you know the paperwork requirements when making an international money transfer from South Africa.

If the idea of handling all of this by yourself as a new expat is overwhelming, FinGlobal can handle the hassle on your behalf. Our dedicated team of tax experts, international financial planners and exchange control specialists is ready to streamline the migration of your finances out of South Africa from start to finish. We can even help you with tax emigration, tax clearance, retirement annuity withdrawal, and forex.

Do you have questions about banking as a non-resident or need some expat tax guidance? We’re here to help! Just leave your contact details below, and we’ll contact you.