Using your discretionary allowance for foreign investment

Have you considered using part of your discretionary allowance for a foreign investment? Would you like to transfer money to an offshore bank account, but you are not sure how to go about doing this?

A Discretionary Allowance is available to South African citizens and permanent residents who hold a South African Identity Document or those who have lived in South Africa for at least 5 years.

Residents, who are above the age of 18 years may benefit from a discretionary allowance within an overall limit of R1 million per individual per calendar year, without the requirement to obtain a Tax Clearance Certificate. It is important to note that unused allowances may not be carried over from one calendar year to another.

Apart from a Discretionary Allowance, individuals may invest R4 Million outside of South Africa per year. The R4 Million Foreign Investment Allowance applies to all taxpayers above the age of 18 years old and represents an allowance per calendar year. The first step to transferring the investment allowance out of South Africa is to obtain a Tax Clearance Certificate from the South African Revenue Service.

Your R1 million Discretionary Allowance may be made up of one or more of the following in a calendar year:

·         Donations

·         Maintenance transfers

·         Travel allowance

·         Gifts allowance

·         Study allowance

If you are interested in using part of your discretionary allowance to transfer money out of South Africa, let one of our professional consultants at Currency Solutions assist you. To know more about how we can help you Contact Us.

Want to know where the markets are? View our Live Currency Rates.