More South Africans are exploring money transfer abroad – tax expert

According to Jonty Leon, legal manager of financial emigration at Tax Consulting SA, an increasing number of South Africans have begun to study their options for transferring money abroad.

The company has also seen a sharp increase in the number of people who are relocating funds and investing abroad.

"There are various reasons to speculate on why people are transferring money abroad, some of whom are migrating financially because of their relocation abroad. include better investment opportunities abroad, the weakening of the rand and political instability, "said Leon.

"Many have mentioned that discussions over the expropriation of land without compensation led them to believe that their investments in South Africa were no longer secure."

Leon reports that the exchange control system regulates the inflow and outflow of money into South Africa and that it affects both individuals and businesses.

There are two main ways to expatriate funds from South Africa, namely the single discretionary deduction and capital cost allowance for foreign capital.

The single discretionary allowance is intended for residents of South Africa aged 18 or older and provided with a valid identity document from South Africa. This allowance is 1 million rand per calendar year and per individual.

The capital allocation abroad gives a resident of South Africa aged 18 or older the opportunity to deport funds of up to $ 10 million. rands per calendar year.
Prior authorization is required for expatriation funds under the capital deduction abroad.

If a person wishes to transfer South African banknotes abroad, the limit to enter or leave an AS is 25,000 rand per individual. When traveling between countries of the Common Monetary Area – South Africa, Lesotho, Namibia and Swaziland – the amount is unlimited.

The exchange rate is another decisive factor for the withdrawal of money in South Africa.

"Moving money outside of South Africa when the rand is low, is like making a bad investment. Make sure you schedule your money abroad well. according to the exchange rate, "Leon said.

"Compliance is another aspect of the expatriation of funds that needs to be carefully considered and respected." Those looking for expatriate funds should make sure to comply with all regulations in force within the framework of the transaction."

Something as seemingly minimal as providing an inaccurate statement in a statement to the SARB may cause you to be found guilty of an offense in terms of exchange control regulations. If you are found guilty of such an offense, you could be fined up to 250,000 rand, or up to five years imprisonment, or both.

Tax Consulting SA also advises its clients to look for a reputable foreign exchange company when they are looking for expatriation funds.