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Moving Money Out Of South Africa – Everything You Need To Know

Guide to moving money out of south africa

Are you looking at moving money out of South Africa?

Are you wondering how it works, how much money you can transfer, and whether you need a SARS tax clearance?

I get so many questions from people about moving money out of South Africa, so I’ve put together this comprehensive guide with everything you need to know about moving your money overseas whether you are relocating abroad temporarily or permanently.

What You Need To Know About Moving Your Money Out Of South Africa

Can I Transfer My Money Out Of South Africa?

Yes is the simple answer!

Every South African who has not completed tax emigration can transfer funds easily out of South Africa. You need to have your green ID book or ID card, your South African tax number, and a recent proof of address for where you currently live.

If you lived in South Africa but were not born there or ever issued with an ID number, you can also move your funds out of South Africa, as long as you can prove the source of the funds, in addition to providing the necessary ID documents.

How Much Money Can I Move Overseas?

If you are South African, aged 18 or over, and have not completed tax emigration, you are entitled to transfer up to R1 million every calendar year outside of the country without a tax clearance. This can be sent to different countries or accounts, or be used to buy goods overseas, as long as the total over the year does not exceed R1 million.

This is often referred to as your Single Discretionary Allowance (SDA).

Cash withdrawals and card transactions while overseas count towards this limit too, so keep that in mind if you use your bank cards while outside of South Africa.

What Happens If I Want To Transfer Very Large Amounts Of Money Internationally?

If you want to transfer more than R1 million rand outside South Africa in any given calendar year, you are also entitled to move an additional R10 million per calendar year, on top of the initial R1 million from your single discretionary allowance.

This is called your Foreign Investment Allowance (FIA).

That means that all eligible people can transfer up to R11 million per calendar year out of South Africa.

Do I Need A SARS Tax Clearance To Move Money Out Of South Africa?

When you use your SDA of up to R1m, you do not need to obtain a SARS tax clearance.

When you use your FIA of up to R10m, after using your SDA of R1m, you will need to obtain an FIA tax clearance certificate from SARS – often abbreviated to FIA TCC.

You will need to be in good standing with SARS to get one – if you have any outstanding debts or tax issues, your application will be declined.

While timelines cannot be guaranteed, it usually takes 4-6 weeks to get a tax clearance certificate from SARS. If anyone tells you they will get you a free tax clearance in 3 days, I wouldn’t be so sure!

You would need to get a tax clearance for the amount you want to transfer, and you need to have evidence of the funds, either with a bank statement showing the balance available, or if the funds are coming from an investment to be surrendered, you could use the latest policy statement.

However, be aware that as policy values rise and fall with the market until the moment they are encashed, it is usually best to wait until your funds are in the bank before applying for a SARS tax clearance, as then you know the exact amount you need to apply for.

Also note that while you can apply for tax clearance certificates for a specific value, SARS has a habit of rounding down the figures on your clearance certificate. I’ve had clients where we have applied for a value of R488,000 and SARS has only granted one for R480,000. There is no rhyme, reason or arguing unfortunately but it’s usually close to the value you specify on your application.

FIA TCCs are valid for 12 months from the date of issue.

What’s The Easiest Way To Move Money Out Of South Africa?

I might be a little bit biased but the best way to move your money out of South Africa into an overseas account is via an intermediary like Rand Rescue.

When you transfer using your usual bank in South Africa, you will often get slugged with high fees plus high exchange rates – most of the big banks in South Africa add anything from 40c to over 80c to the rate of exchange on the day. Those are huge margins and can make a big dent in the foreign currency value you end up with.

I work with Rand Rescue and have helped heaps of South Africans move their funds to Australia, Ireland, the UK and beyond. We use a bank called Mercantile Bank who offer low transfer fees, no account fees, and excellent rates of exchange for our clients. Find out more about our process to open a bank account in South Africa here.

How Much Money Can I Send As A Gift Outside Of South Africa?

If you want to send funds to someone else overseas, be aware that South Africa has a gift allowance of R100,000 per person per year. That means one person can gift up to R100,000 to one person, or multiple people, during the year.

Any gifts over R100,000 are subject to gift tax of 20%.

Also be aware that if the donor does not pay the gift tax, the recipient can be billed by SARS for this tax instead.

When sending funds to other people, either within South Africa, or outside South Africa, please ensure you are across the tax implications by consulting with a registered tax practitioner.

What Are The Tax Implications For Moving Money Out Of South Africa?

As I am not a tax practitioner, I cannot answer this question, but Gill Nathan from Simple Solutions Accounting Services can.

Gill is a registered tax agent in South Africa and Australia, making her well-versed in the tax implications of funds transfers between these two countries.

Gill says:

“So you are wanting to bring funds over to Australia and want to know if its taxable in Australia or not – well, the short answer is it depends!

If the funds that you are wanting to transfer over to Australia are funds that were related to post tax savings in South Africa or to the sale of assets PRIOR to becoming a resident in Australia – then you could bring those funds over to Australia and they are not taxable in Australia on transfer.

However, (obviously) if you chose to invest those funds (once you have transferred them over) in a bank account in Australia that earns interest – then that interest will be taxable, or if you invest in shares or an investment property and earn dividends or rental income, then those dividends or rental income will be taxable.

However, if you are already living in Australia and are a (permanent) tax resident in Australia, you are subject to tax on your worldwide income. If you then sell assets in South Africa, and bring those funds over to Australia – then there will be a tax implication and a capital gains tax calculation required in Australia.

That’s it in a nutshell.  Its best to consult a tax accountant if you are not sure.”

Thank you Gill!

How Long Will It Take Before The Money Reflects In My Overseas Account?

When you use Rand Rescue and Mercantile Bank to transfer your funds from South Africa to another country, it usually takes 3-4 working days to land in your account.

There can be delays if there are public holidays in either of the countries the money is going to or from, and it also depends on how efficient the recipient bank is at allocating the funds correctly.

But usually, it’s a quick and easy process with funds appearing swiftly in the recipient account.

How Much Does It Cost To Transfer Money Out Of South Africa?

Now this comes down to which banks you use, and if using an intermediary, which company you use to assist you with your money transfer.

At Rand Rescue, we charge no fees to assist you with opening a South African account, which you’ll need to do so we have authority to arrange transfers out of the account on your instruction.

There are no monthly fees to maintain the bank account with Mercantile Bank either.

Mercantile Bank will charge a transfer fee for each transfer out of the account – currently that is R250 for international transfer.

And then there is the small margin on the exchange rate on the day. Our margins are way below most of the main banks in South Africa. That means using our services will not only save you time and hassle, but you’ll save money too. And when you’re emigrating and starting a new life in Australia, every dollar counts!

Remember that your receiving bank is likely to also charge you a fee for receiving international funds as well. Some charge a flat fee and others charge a sliding fee depending on the value received.

Can I Transfer Money To My Spouse To Use Their Annual Allowances?

Yes you sure can! If you’ve used your annual SDA or FIA, but still have more funds to transfer in the same calendar year, you can transfer them into an account in your spouse’s name and make use of their annual allowances too.

There are no gift tax implication between spouses so funds can be moved between them to make use of each individual allowance.

Can I Send Money Overseas To An Account That Is Not In My Name?

You can, but this would fall under your gift allowance as described above.

If transferring your own funds for your use, the money must be sent to a recipient account in your own name. It can be a joint account but your name must be on it. For example, one spouse cannot transfer funds from an account in their name to an account in their spouse’s name only.

Hopefully this guide to moving money out of South Africa has answered all your questions about the process and more.

If you have any further questions, or would like me to assist you with transferring your funds from South Africa to another country, you can email me at reeva.cutting@randgroup.biz. I’ve helped heaps of South Africans get their money transferred overseas and would love to help you as well!

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