Real Estate Investor Magazine South Africa August 2015 | Page 58

FOREX
FOREIGN

How To Unlock Your Cash
Unlocking South African capital for South Africans abroad
BY ANTHONY RISSIK

T

ransferring South African Rands out of SA
has never been a simple process. Since the
1960s anyone wanting to transfer funds abroad
has been restricted by South African Reserve Bank
(SARB) Exchange Controls to varying degrees.
Excon relaxations over the past decade have resulted
in most South Africans who can afford to transfer
money out of the country, doing so to the fullest
possible extent.
In the last three years, Excon restrictions have
effectively vanished, except for the ultra-wealthy,
with the annual allowance adjustment in 2015 to
R11 million per individual (or R22 million per
married couple) – broken down into a R10 million
Foreign Investment Allowance (FIA) and one million
discretionary allowance per individual.
Although this relaxation is positive, it has coincided
with a rapidly devaluing Rand, making the reality of

“Unlocking SA capital though
formal emigration (also referred to
as financial emigration) effectively
allows South Africans unlimited
access to their SA capital.”
offshore money transfers no less challenging for those
wanting to access SA capital from abroad.
Taking the currency valuation question out of the
equation, what are the options for South Africans
wanting to unlock SA capital for purposes abroad?
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AUGUST 2015 SA Real Estate Investor

There are three distinct categories of South Africans
to consider:
1. South African investors looking for diversification
and Rand hedged investment opportunities abroad.
2. Relocated South Africans (aiming to- or having
left), looking to access capital to remit offshore, but
who are still tax-residents in SA.
3. Emigrations, in the traditional sense - South
Africans willing to effectively sever financial ties
with SA, are becoming non-tax residents in SA and
moving abroad with the aim of settling elsewhere
permanently.
Relocated South Africans
The same allowance mechanisms available to SA
investors seeking to invest directly offshore are
available to those who have relocated and not yet taken
advantage of the existing allowances.
The R1 million annual discretionary allowance does
not require tax clearance from SARS (individual good
standing) but the annual R10 million FIA does. You are
only able to make use of the R1 million discretionary
allowances during your first calendar year out of SA.
South Africans, who have not emigrated, irrespective
of the time they have been living elsewhere, are still
viewed by SARS as South African tax residents that
are ‘temporarily abroad’. It is here that these South
Africans abroad, who have invariably not kept their
South African tax submissions up to date, run into
trouble.

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