What is a single discretionary allowance?
It is an allowance within an overall limit of R1 million per calendar year which a South African resident over the age of 18 years may avail of.
What can be transferred under the single discretionary allowance?
The single discretionary allowance may used for any legal purpose abroad (including for investment purposes). This dispensation may be utilised solely at the discretion of the resident without any documentary evidence, pertaining to the funds to be transferred, having to be produced to the Authorised Dealer, i.e. commercial bank except for travel purposes outside the Common Monetary Area where a passenger ticket needs to be produced.
The resident individual must produce a valid green bar-coded South African Identity Document or Smart ID card for identification purposes at the Authorised Dealer and the identity number is mandatory when the bank reports the transaction in terms of the FinSurv Reporting System.
What rules are applicable to South African residents travelling abroad?
(i) Residents over the age of 18 years may avail of a travel allowance within the single discretionary allowance limit of R1 million.
(ii) Residents under the age of 18 years may only be accorded a travel allowance of up to R200 000 per calendar year.
(iii) Foreign exchange, in respect of a travel allowance may be provided in any authorised form. The travel allowance may also be transferred abroad to the traveller’s own bank account, but not to an account of a third party.
(iv) Foreign currency for travel purposes may not be bought more than 60 days prior to the departure of the traveller.
(v) Travellers may not use the foreign currency they purchase for any purpose other than stated/declared when they purchased it.
(vi) Travellers must convert unused foreign exchange to Rand within 30 days of returning to South Africa.
(vii) In the case of a travel allowance, if all the funds were not spent on holiday expenditure, the traveller may not keep the funds offshore or buy offshore assets.
(viii) The cost of land arrangements (hotels, cruises, tours, etc.) forms part of the traveller's travel allowance, but payment locally of airfares does not.
(ix) A SARS Customs Declaration may be required for any goods taken out of South Africa. Where the insured value of the item exceeds R200 000, prior written approval from the Financial Surveillance Department is required to be obtained, via an Authorised Dealer, i.e. commercial bank. Where the items exported will not be returned to South Africa and where the insurance value thereof exceeds R50 000, an application must also be submitted to the Financial Surveillance Department, via an Authorised Dealer.
(x) Travellers may also take up to a total value of R25 000 per person in the form of Rand notes.
How much can an individual invest offshore?
(i) A tax-payer in good standing and over the age of 18 years, can invest up to R10 million in his/her name outside the Common Monetary Area (CMA-Lesotho, Eswatini and Namibia, including South Africa), per calendar year. A Tax Clearance Certificate (in respect of foreign investments) must be obtained. These funds may not be reinvested into the CMA countries thereby creating a loop structure or be re-introduced as a loan to a CMA resident.
(ii) As an exception to the above, private individuals are permitted individually or collectively to acquire up to 40 per cent equity and/or voting rights, whichever is the higher, in a foreign target entity, which may in turn hold investments and/or make loans into any CMA country. This dispensation will only apply in respect of loop structures formed after 2019-10-30.
(iii) In addition, up to R1 million, within the single discretionary allowance, can be transferred abroad, without the requirement to obtain a Tax Clearance Certificate.
What if I want to invest more than R10 million per calendar year?
(i) The Authorised Dealer, i.e. commercial bank at which you bank must submit an application to the Financial Surveillance Department of the South African Reserve Bank for approval. A printed SARS tax compliance status verification result must accompany the application.
(ii) In terms of the SARS Tax Compliance Status (TCS) system, a TCS PIN letter will be issued to the taxpayer that will contain the tax number and TCS PIN. Authorised Dealers must use the TCS PIN to verify the taxpayer’s tax compliance status via SARS eFiling prior to effecting any transfers.
Can a private individual open a bank account in South Africa denominated in foreign currency?
Yes. Private individuals (natural persons) resident in South Africa may open a Foreign Currency Account for permissible transactions.
What value of Krugerrand coins can be taken out of South Africa?
Authorised Dealers, i.e. commercial banks may allow the export of Krugerrand coins or the equivalent in fractional Krugerrand coins up to an amount of R30 000 as gifts by residents to non-residents.
Non-resident visitors may export up to 15 Krugerrand coins or the equivalent in fractional Krugerrand coins, supported by the prescribed SARS Customs Declaration, provided that they can prove that the coins were acquired with the proceeds of foreign currency introduced into South Africa.
What is the maximum amount of cash (both Rand and foreign currency) that can be introduced into South Africa?
Visitors to South Africa and South African residents are not permitted to import or export South African Reserve Bank notes or any bank notes of other member countries of the Common Monetary Area (CMA – Lesotho, Namibia and Eswatini, including South Africa) in excess of a total value of R25 000 per person.
Visitors to South Africa are entitled to bring foreign currency in any format into South Africa, which foreign currency is convertible into Rand at any bank. Confirmation of this conversion should be retained should the visitor want to convert the Rand back into foreign currency.