Understanding your R1 million discretionary allowance
South Africans are allowed to transfer up to R1 million offshore per calendar year without having to obtain a Foreign Tax Clearance Certificate. This amount is covered by your annual discretionary allowance. The annual discretionary allowance applies to all South African residents over the age of 18 years.
Your discretionary allowance is applicable for the following reasons:
- Monetary gifts and loans: South African resident to non-resident
- Travel allowance: South African resident within 60 days before departure date
- Donations to missionaries
- Foreign capital allowance
- Wedding expenses, if backed up by documentary evidence
- Study allowance, if supported by proof of registration
- Maintenance and alimony payments, as per court orders
- Travel allowance for minors (R200,000 per calendar year)
- Any use of your South African debit or credit card abroad
If you need to make a transfer for any of the above reasons, then please, don’t hesitate to get hold of us. We can make sure your transfer is processed as efficiently as possible. We’ll also make sure you get the best rates and lowest fees. It’s what you deserve after all.Get a quote
Understanding your R10 million individual South African foreign investment allowance
Resident South Africans, or South African citizens living abroad who have not yet formally emigrated in terms of exchange control (also known as financial emigration) are entitled to make use of the R10 million foreign investment allowance. This allowance is not as easy to use as the single discretionary allowance, but it is by no means impossible to apply for.
The R10 million foreign investment allowance may be invested into offshore investment portfolios, property, bank accounts or other investments. The allowance has not always been this high, but in 1 April 2015, the foreign investment allowance increased from R4 million to R10 million per person per calendar year and R20 million per family unit.
To send more than R1 million offshore, you’re going to need a Foreign Tax Clearance (FTCC) from SARS. This certificate is valid for 12 months and it allows you to transfer up to R10 million. As part of our forex service, we can apply for your FTCC, greatly reducing the amount of time you will have to wait for your certificate.
We can help you make use of your allowances, free of charge, and if you wish to exceed the amounts above, we can assist you with applying to the SARB for special dispensation. These applications can be complex, and are judged on a case by case basis, so having the right partner in your corner can make all the difference.Get a quote
Are there limits to transferring money out of South Africa?
Should you wish to exceed this R11 million amount, we can assist you in applying for a Letter of Compliance from SARS. This will allow you to transfer more than R11 million in a year. Once this letter has been delivered, it must also be sent to the SARB for approval. Once approved, you will be able to externalise your funds.
There is no limit to how much money you can send out of the country with such an application, but each application is judged on its own merits. We have experience with these applications and can assist you through the process to ensure your application had the greatest chance of success.
How to transfer more than your yearly limits without a letter of compliance
Financial emigration, also known as formal emigration, is the process whereby you change your status with the SARB and SARS to non-tax-resident. It is vital you do this if you plan on emigrating permanently from South Africa, as it will allow you to send funds out of the Republic in excess of your yearly allowances.
Consider the following example: If you left South Africa to go and work in Australia for two years on a contract, and then 10 years later you are still living Down Under, you’ll most likely want to move all your assets to your new home. If you don’t financially emigrate in terms of exchange control, the SARB will designate you as a South African Resident temporarily abroad. This means you will only be entitled to the R10 million foreign investment allowance and the R1 million single discretionary allowance.
These yearly limits can become costly and frustrating, especially if you want to send large sums of money out of South Africa. This often becomes an issue when South African expats receive a large inheritance or sell a property.
If you’re planning on emigrating, we can help with all the paperwork and logistics so that your funds reach your new destination without hassle.
You’ll need the following documents to transfer your money out of South Africa:
- Form MP 336(b)
- South African ID or passport
- SARB Formal Emigration Number
- Proof of address
Whether you’re an expat living in South Africa, or a migrant worker on a short-term work contract, your personal account manager can help you send your money home.
Why transfer with us?
We are an established foreign exchange service with over a decade of experience, as well as offices across South Africa, the UK and Australia. As your forex partner, we can ensure you are always compliant, and you get the most competitive exchange rates. What’s more, we pride ourselves on exceptional customer service, and our South African team is always on hand and will be happy to assist you with any query you may have along the way.
Forget about your bank
Many South African’s first port of call when thinking of making large international money transfers is the bank. However, the bank falls short when it comes to advice, competitive pricing and attractive rates. A trusted forex provider can save you a considerable amount on every transfer you make and advise you on how to make the most out of every transfer.
Why our clients love our forex service
We are fully compliant with the South African Reserve Bank, Financial Services Conduct Authority and South African Revenue Services.
No obligation consultations
We offer all prospective clients complimentary no obligation consultations on their personal or business forex needs.
Let us answer your questions about transferring money
You may have some questions about transferring your hard-earned money, and we understand. You are right to want to know more about our service before you choose to transfer with us.
Below are the answers to the questions we get asked most regularly.
If you still have questions after reading the FAQs below, you can contact our South African based team on +27 (0) 21 657 2153. If you’d rather keep things online, you can email email@example.com and we’ll help you out.
1. Once registered, how long does it take to activate my account?
As soon as we have received your compliance documents, your account will be activated within 24-48 hours.
If your remittance request exceeds R1 million, you will need to obtain a tax clearance certificate and provide us with a PIN.
2. How long does a transfer take to be processed?
Once we have received all the necessary documentation associated with the transaction and your funds have cleared in your Investec account, we will quote you a rate for your transfer. The converted funds will be credited to your nominated overseas account within two to three working days.
3. What are the minimum and maximum amounts that can be transferred?
Our minimum transfer amount is R100,000 to be able to benefit from our services. As a South African ID book holder, you are able to remit R1 million under your discretionary allowance and an additional R10 million per year with the aid of a tax clearance certificate for foreign investment.
If you are a South African non-resident (this means that you have never been issued with a South African ID book or ID number) there is no limit to the funds that you may remit from South Africa, provided that you can prove the source of the funds. Please contact us on firstname.lastname@example.org for more information.
There are certain benefits to sending larger amounts. To find out more about the benefits of sending larger amounts pop us an email, or give us a call, and tell us how much you’d like to send, and we’ll walk you through the currency conversion process.
4. What methods of payment can I use to transfer the funds to your account?
5. Are there any hidden charges or receiving bank charges?
Not at all. Our transfers carry a shared swift fee of R250, which ensures that only the South African bank charges are covered. When the funds clear in your recipient account the intermediary and receiving bank may charge a bank fee to depending on whom you bank with and this is generally £15. Alternatively, we charge R450, which ensures that all fees are covered.
6. What are the requirements of a registered Money Service Business?
The law requires us to monitor any unusual or suspicious transactions of any size taking place where we have reason to believe the money is derived from illegal activity. We will report any suspicious international money transfers to the authorities.
The law also requires us to keep full records of all transactions, together with copies of identification provided. We are unable to process any transaction where this information is withheld. Proof of address and proof of funds may be required in certain cases – please see our “know your customer” guidelines for more information.
Get in touch
Fill in your details below and one of our consultants will be in touch as soon as they are able.
In the section "Tell us about your situation", please include the following information:
Do you have a South African ID?
Do you have a SARS tax number?
What Rand amount would you like to send?
Are you sending money to your own account or a third-party account?