Offshore travel and investment guidelines
As a Wealth and Investment client, you have access to a range of offshore solutions that enable you to take full advantage of your travel and investment allowances. While South Africa’s exchange control regulations provide a good deal of flexibility in this regard, there are some important guidelines that must be followed to avoid incurring penalties. These include:
Staying within your Single Discretionary Allowance
All South African residents over the age of 18 are granted a Single Discretionary Allowance (SDA) of up to R1 million per calendar year (from 1 January to 31 December). You may use your SDA for any legal purpose abroad, including investment and travel, without the need to obtain prior approval from the SARB. You can also use your credit and / or debit cards for up to 100 % of your SDA while travelling abroad, subject to the available balance or credit limit on the account. Please note that your SDA limit may not be carried forward to the following calendar year.
For more information regarding the usage and regulations relating to your SDA, please view the guidelines here.
Investing your Foreign Capital Allowance
You are entitled to a Foreign Capital Allowance (FCA) with an overall limit of R10 million per individual per calendar year. Funds may be used for investment purposes abroad and/or converted to foreign currency. If you want to utilise your FCA, you will need to apply for an AIT (Approval for International Transfer) from SARS. It is worth noting that you can apply to invest or transfer funds in excess of your annual R10 million FCA, subject to approval by the SARB Financial Surveillance Department.
Detailed information on the regulations governing the FCA can be viewed here.
Making cross-border transactions on cards
You can make foreign currency payments up to the value of R50 000 per transaction on your credit and / or debit card. It is important to note that transactions may not be split to circumvent the limit applicable to this dispensation. Cards may also not be used for any foreign lottery or online gambling activities, to fund international trading, or to fund foreign currency accounts in South Africa or offshore.
Guidelines relating to the regulations applicable to cross-border transactions on cards are available here.
Kindly note that failure to comply with the exchange control regulations may incur penalties or result in action being taken by the SARB. For more information and guidance, please refer to the Currency and Exchanges Manual for Individuals, which can be viewed at www.resbank.co.za.