If you live abroad and are due an inheritance from a South African estate, you may be surprised to learn that the slowest part of the process is often not the estate itself. It is proving your own tax status to the South African Revenue Service (SARS) so that the money can legally leave the country. This article explains where cross-border estate payouts get stuck, how the rules changed after the end of financial emigration, and why completing tax emigration from South Africa early is the single most effective way to speed things up.
Please note: this article is general information, not tax, legal or financial advice. Rules change frequently, so confirm the current position with SARS, the South African Reserve Bank (SARB) or a qualified cross-border adviser before acting.
South African inheritance overseas: two processes, two sets of delays
A cross-border inheritance payout involves two separate hurdles:
- Winding up the estate in South Africa. The executor must be appointed by the Master of the High Court, assets must be valued, creditors advertised for, a liquidation and distribution account lodged and approved, and estate duty settled where applicable. South Africa levies estate duty at 20% on the dutiable value above the R3.5 million abatement, rising to 25% on the portion above R30 million. Heirs have little control over this timeline.
- Getting the money out of South Africa. Once the estate is ready to pay out, the funds still cannot leave the country until the beneficiary satisfies exchange control and SARS compliance requirements.
You cannot do much about the first hurdle, but you can prepare for the second one long before the estate is finalised. That is where tax emigration comes in.
Read more: SARS and deceased estates – steps before inheritance is paid out
Why your tax residency status matters so much
Since 1 March 2021, the old “financial emigration” process through the SARB no longer exists. It was replaced by tax emigration, which means formally demonstrating to SARS that you have ceased to be a South African tax resident. Physically living overseas for years does not change your status by itself. Until you complete the process, SARS still treats you as a tax resident.
Read more: Cease to be an SA Tax Resident and Reinstatement of SA Tax Resident | South African Revenue Service
Your status determines which route your inheritance takes out of the country:
- An individual who remains a South African tax resident with a valid ID: you can use your single discretionary allowance (SDA) without prior SARS clearance. The SDA was doubled from R1 million to R2 million per calendar year with effect from 8 April 2026. Above that, you need a SARS Approval for International Transfer (AIT) under the R10 million foreign investment allowance, and amounts above R10 million also require SARB Financial Surveillance approval.
- A tax resident on paper but without an active tax number: this is a common trap for long-departed expats. You cannot transact as a tax resident. However, you can transfer funds abroad once you have obtained a manual tax clearance from SARS.
- A confirmed non-resident: with a SARS tax non-resident confirmation letter in hand, the transfer route is clearer.
- Never a South African resident (for example, a foreign heir with no SA ties): the process is relatively straightforward once you can prove your non-resident tax status and the source of the funds.
- There is one helpful concession: individuals who have ceased to be tax residents and are no longer active on the SARS register can receive an inheritance of up to R10 million without applying for a manual letter of compliance. Above R10 million, the letter is required (SARS).
The biggest problem
Unresolved tax residency. Many expats left South Africa years ago without informing SARS or completed the old SARB financial emigration before 2021 and assume that still counts. It does not settle your tax status. South African expat heirs must prove their financial emigration approval or tax non-resident status to transfer their inheritance abroad. If they can’t, these heirs must regularise their position through tax emigration and obtain a non-resident confirmation letter before being able to transfer their inheritance abroad.
Read more: Document checklist for transferring an inheritance from South Africa
How tax emigration speeds things up
Your non-resident tax status allows you to transfer the proceeds from your inheritance abroad without having to comply with any SARS requirements.
The speed benefit is simple: if you complete this process before the estate is wound up, your side of the compliance work is already done when the executor is ready to pay. Advisers consistently recommend finalising tax emigration before dealing with an inheritance precisely because it avoids the scramble to prove your status after the fact.
A practical checklist to speed up your payout
- Confirm your tax residency status now, not when the estate pays out. If you left South Africa without informing SARS, or only did the pre-2021 financial emigration, start the tax emigration process as early as possible.
- Obtain and safeguard your SARS non-resident confirmation letter. You will need it.
- Know your thresholds. As a tax resident living abroad, the SDA now covers up to R2 million per calendar year without prior clearance. Larger amounts will require the ceasing of tax residency. Tax non-residents can transfer up to R10 million if the source of funds is inheritance proceeds. For amounts exceeding R10 million, they require SARB approval and a manual tax clearance from SARS.
The bottom line
You cannot make the Master of the High Court move faster, but you can make sure that the moment the estate is ready to distribute, nothing on your side stands in the way. For heirs living abroad, that almost always means sorting out tax emigration from South Africa and your SARS compliance before the estate reaches the payout stage. Done early, tax emigration turns the cross-border transfer from a months-long compliance headache into a largely administrative step.
Given the exit charge and the documentation involved, it is worth getting professional advice from a cross-border tax specialist before you start, particularly if you hold significant investments, or the inheritance is large.
Ready to get your inheritance moving?
Don’t let red tape stand between you and your inheritance. FinGlobal specialises in cross-border financial services for South Africans living abroad, and can manage the entire process on your behalf, from tax emigration from South Africa and your SARS non-resident confirmation letter to the international transfer of your funds. Contact FinGlobal today for a free, no-obligation assessment of your situation and take the first step towards a faster, fully compliant payout.
Article written by Hano Vermaak, expat financial specialist at FinGlobal.
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