Real Estate Investor Magazine South Africa December / Jan 2016

FINANCE Discretionary Allowance Offshore Property a hedge against Local Volatility BY ANDREW RISSIK I I recommend you make use of these allowances while they are still available. If the current trend of disinvestment and Rand decline continues, the government may well impose some tighter capital controls in the future. The benefits of using your discretionary allowance It’s quick and easy. All you have to do is book your exchange rate with Sable Forex and two days later, we will have your funds in the offshore account of your choice. You don’t need a tax clearance from SARS so there is very little administration. Besides this, the money can be used for anything, including foreign investment. If you are married and haven’t used your 2015 allowance, you could move up to R4 million between now and early January 2016. Offshore property investing as a hedge against local volatility South Africa has always been deeply integrated into a capitalist international political economy. As a result, external factors in the global economy have an influence on our economy domestically. The very government that manages our economy today was born from the party that used internal tactics to influence market dynamics abroad. In the late 20th century, these strategies had powerful effects, eventually coercing the previous regime to make changes to our political landscape. Ironically, the current government is now being punished by international markets in a similar way. The disregard for the capitalist disciplines of a modern globalised economy, in favour of a blatantly communist system based on patronage and abuse of power, influence international market dynamics where South Africa is concerned. f you haven’t already used your annual offshore allowances for 2015, now might be a good time. In my last article I concluded that South African investors should be asking whether offshore investing is part of their strategy instead of questioning what the Rand will do. Every year South Africans receive a discretionary offshore allowance of one million Rand and a capital allowance of R10 million. As the end of the year approaches, it is important to ensure that you have made use of these allowances if you intend on investing offshore. Let’s take a look at how you can use your discretionary allowance by investing in offshore property and why that’s a good idea. 60 DEC/JAN 2016 SA Real Estate Investor www.reimag.co.za

Real Estate Investor Magazine South Africa December / Jan 2016 | Page 62