South Africans over the age of 18 have two allowances for transferring funds offshore per calendar year: A R1 million single discretionary (SDA) (which doesn’t require tax clearance) and a R10 million foreign investment allowance (FIA) (which requires tax clearance). These allowances are sometimes used for transferring inheritance out of South Africa, however you want to have a South African ID e-book or ID card and, for the FIA, a South African tax quantity.
South African inheritance prior to March 2021
Where a South African residing abroad didn’t have an SA ID (both lost or by no means issued), financial emigration (FE) was an choice to obtain the proceeds from a South African deceased property. FE was a reasonably complicated course of that enabled South Africans to declare themselves non-resident with the South African Reserve Bank (SARB) for alternate management functions. This was helpful as a result of, when you had been recognised by the SARB as being non-resident in South Africa, you had been in a position to transfer belongings overseas (resembling passive earnings, dividends, director’s charges, retirement annuities and inheritance), typically with out additional application.
If you had been a South African citizen residing abroad and also you obtained a South African inheritance, however you didn’t have an id doc or tax quantity in South Africa, you can endure a “belated emigration” course of as an alternative of utilizing your annual allowance. Like monetary emigration, this course of went by the SARB and declared you non-resident in order that you can obtain your inheritance. It was fairly simple and would solely take a couple of week earlier than the property may pay funds over to the beneficiary.
The Taxation Laws Amendment Act, which got here into impact in March 2021, introduced an end to financial emigration and, as a consequence, belated immigration. The SARB additionally not too long ago launched a round that included a ruling stating that offered the person (beneficiary) has ceased to be resident for tax functions and is not lively on the SARS registered database, they might obtain an inheritance (or life insurance coverage coverage) of up to R10 million. For quantities higher than R10 million, a handbook letter of compliance is required.
The problem for the beneficiary is proving this standing with SARS.
We might help. Contact Sable International at [email protected] for assist with this.
The present eventualities for expats inheriting from a South African property
- If you’ve gotten your id doc (ID e-book or ID card), you haven’t tax emigrated from South Africa and your inheritance is below R1 million, that is nonetheless an easy course of as you should utilize your SDA.
- If you’ve gotten your id doc (ID e-book or ID card), and your inheritance is over R1 million however below R10 million, you’ll need tax clearance and a South African tax quantity (even when it’s dormant) in order that SARS can make sure you’re compliant. If you’ve gotten an SA tax quantity, that is additionally a comparatively simple course of.
- If you’ve gotten your id doc (ID e-book or ID card), and your inheritance is over R1 million however below R10 million and also you don’t have an SA tax quantity, you’ll both want to register for a tax quantity and apply for tax clearance or, when it comes to the brand new ruling, demonstrate you have ceased to be a resident for tax purposes and are not lively on the SARS system.
- If you had been born in SA however had been by no means issued an SA ID doc otherwise you’ve lost it, you’ll need to display you’ve gotten ceased to be resident for tax functions and are not lively on the SARS registered database. Then you might obtain an inheritance (or life insurance coverage coverage) of up to R10 million.
- If your inheritance is over R10 million, you’ll require a particular application to SARS and a handbook tax compliance letter to transfer it overseas.
We’ve been serving to people and companies make worldwide transfers out of South Africa for over 20 years. For assist receiving a South African deceased property as an expat, you will get in contact at [email protected] or give one in all our advisers a name on +27 (0) 21 657 2133.