Individuals considering investing opportunities outside of SA
In the last year, we have seen an increase in client queries regarding the requirements to take funds out of South Africa. This is not too surprising when you consider the world embracing a global marketplace or other reasons such as diversifying investments or better growth opportunities. The foreign investment allowance rules are based on the standard calendar year and are broken down into three sections.
1) Annual Discretionary allowance
The first portion is a foreign investment allowance that is the annual discretionary allowance of R1 million. This is an allowance for all individuals each year and is intended to be used mostly for travelling. It allows you to buy currency and spend money when outside the borders of South Africa. The taxpayer is still able to make use of this allowance to make investments but once the R1 million mark is reached the financial institution you are using to assist with the transfer of funds will inform you that you now require a SARS tax clearance to remit additional funds offshore.
2) SARS Clearance to remit funds offshore
This is an application you make to SARS to grant you additional clearance to take funds offshore and the application can be made through Efiling. The maximum application that can be made to SARS is for R10 Million in a calendar year and is over and above the R1 million allowance. The allowance that is then granted is valid for 1 year and can be utilised all at once or as and when required. The application process is a pretty simple process when all the correct information is supplied to SARS.
3) Amounts exceeding R11 million
Should you wish to take funds out in excess of the allowance and R10 million you would need to do a special clearance application. This is a much more complex application and is subject to restrictions and requirements by the reserve bank that may entail the submission of annual reports and accounts.
We have extensive experience in the SARS applications process and would be glad to answer any queries you may have and advise or assist with any application you may require.