For South Africans who are still tax residents — whether you’re living at home or abroad — the Single Discretionary Allowance (SDA) is your annual offshore “spending pocket.” It lets you transfer or spend up to R1 million per calendar year outside the country without needing prior approval from SARS or the South African Reserve Bank (SARB). This allowance covers everything from international travel allowance and education costs to investing offshore from South Africa and even everyday international online shopping or streaming subscriptions.

But here’s the catch: once you’ve maxed out your SDA limit, you’ll need to use the Foreign Investment Allowance (FIA) to move additional funds offshore. That process isn’t automatic — you must be fully tax compliant with SARS and obtain the necessary approvals before the money can leave the country. As such you’ll want to ensure you keep a close eye on your spend, as it has a way of adding up quicker than expected.

In this article, we’ll unpack exactly what the SDA is, who it affects, what counts toward it, and what your options are once your allowance runs out — including recent legal insights that make it clear why compliance is essential.

What is the Single Discretionary Allowance (SDA)?

The Single Discretionary Allowance is an exchange control mechanism that gives every tax-resident individual over the age of 18 an annual offshore allowance of R1 million per calendar year.

It can be used for a variety of purposes (hence the name ‘discretionary’), including:

• Travel expenses abroad
• Education and medical costs paid in foreign currency
• Gifts and loans to non-residents
• Maintenance transfers to family living overseas
• Offshore investments, such as shares or property abroad
• International online shopping and subscriptions
• Using credit cards internationally or purchasing foreign currency with credit cards

Think of it as your all-in-one allocation for moving or spending money abroad — provided you remain a South African tax resident.

Read more: Six things SARS wants you to know about the limits on transferring money out of South Africa.

Do international credit cards use count toward your SDA?

Absolutely. Many people assume their SDA allowance South Africa only applies to large transfers or investments. In reality, using credit cards internationally or making international online purchases counts toward your annual SDA limit.

Every foreign swipe or subscription in dollars, euros, pounds, or Australian dollars is reported by your bank and automatically deducted from your SDA. Small charges might feel like a drop in the ocean, but they can add up fast. And with FinSurv (the Financial Surveillance Department) monitoring, these “minor” transactions could push you over the threshold without you realising it.

Is there a separate international travel allowance for South Africans?

For adults, the answer is no. Any travel-related spending — whether purchasing foreign currency before leaving or swiping your card abroad — is included in your Single Discretionary Allowance. The only exception is for minors under 18, who have an individual travel allowance limit of R200 000 per calendar year.

What happens if you exceed your Single Discretionary Allowance limit?

Breaching the SDA South Africa limit can trigger serious consequences:

1. Your bank issues an SDA breach notification (often in Excel format).
2. You must confirm the listed transactions in writing.
3. You are required to submit a detailed explanation to FinSurv within 30 days.
4. FinSurv may impose penalties or restrict your ability to transact offshore.

Recent legal rulings show that even unintentional misuse or attempts to work around the rules can lead to blocking orders on bank accounts. The High Court has confirmed that using multiple SDAs to bypass the rules is unlawful, and the SARB has full authority to enforce compliance.

If you fail to respond, your bank (as an Authorised Dealer) must block further foreign exchange transactions. Continued non-compliance could escalate to administrative or legal action under South African exchange control regulations.

Long story short? Track your spending before it bites back.

Is there a limit on how much money you can transfer out of South Africa?

Yes. South Africa sets strict international money transfer limits:

• Up to R1 million per year → covered under the SDA.
• Beyond R1 million → requires an AIT application SARS with a valid TCS PIN.

Non-tax residents must follow slightly different rules, often needing a Good Standing TCS PIN for income-type funds.

Read more: Don’t let SARS delay your international transfer – essential documents for expats.

SDA vs FIA/AIT: what’s the difference?

Once your R1 million SDA is used up, you need to move to the Foreign Investment Allowance (FIA) — now administered through the Approval International Transfer (AIT) process — if you want to send more money abroad.

Here’s how they differ:

• SDA allowance in South Africa: R1 million annual limit, no pre-approval required.
• FIA / AIT in South Africa: For amounts above R1 million. Requires a valid Tax Compliance Status (TCS) PIN from SARS, and SARB may require additional exchange control approval.

So, if you plan on investing offshore from South Africa in a significant way or transferring large sums abroad, you’ll need to know when you hit your SDA, and then follow the AIT application SARS process carefully. This is not just bureaucracy, it’s there to protect you from legal consequences and ensure your offshore transfers are fully compliant.

Read more: Transferring money out of South Africa – the Single Discretionary Allowance vs the Foreign Capital Allowance.

Understanding exchange control regulations in South Africa

The South African Reserve Bank SARB exchange control rules and regulations govern how money can flow in and out of the country. Banks must report all foreign transactions, and the Financial Surveillance Department (FinSurv) enforces compliance.

Important points to remember about offshore transactions from South Africa:

• Exchange control rulings are binding.
• Breaching your limits can result in blocked accounts or penalties.
• Foreign currency regulations South Africa apply to everything from tuition payments abroad to international online purchases.

Knowing the rules helps protect your financial freedom and keeps your offshore activities compliant.

How to avoid breaching your SDA limit

Let’s talk about some practical steps to stay compliant:

1. Track all foreign currency transactions, including card purchases and subscriptions.
2. Consolidate transactions through a single facilitator to ensure accurate monitoring.
3. Plan ahead: if anticipating exceeding R1 million, apply for an AIT PIN before transferring funds.
4. Seek professional guidance: FinGlobal can help you navigate exchange control South Africa and ensure you remain compliant.

FinGlobal: cross-border financial specialists

Managing your Single Discretionary Allowance (SDA) and Foreign Investment Allowance (FIA/AIT) can be tricky, especially with everyday international spending quietly adding up. Working with experts like FinGlobal is the smartest way to stay fully compliant with SARS and SARB regulations, track your foreign transactions from one place, and plan ahead for larger transfers. Beyond exchange control support, FinGlobal also assists with retirement annuity withdrawal, tax refunds, and other cross-border financial services, ensuring your offshore funds are handled efficiently.

With the FinGlobal client app, you can upload documents, and track progress in real time — all from the convenience of your smartphone. Whether it’s managing offshore transfers, applying for an AIT PIN, or handling international tax matters, FinGlobal keeps you in control and fully compliant, so you can focus on enjoying your global lifestyle without surprises.

If you’d like to hear more about how FinGlobal can simplify your cross-border financial affairs, simply drop your contact details in the form below and we’ll be in touch!