Below we learn about the One Million Annual Allowance that South African residents are able to transfer out of South Africa each calendar year. This one million allowance is also know as the discretionary allowance.
Why is there is an One Million Annual Allowance?
If you are not already aware South Africa operates a system of exchange control. For residents this means they receive certain allowances, that enable them to transfer a certain amount of funds out of South Africa, over a certain time period and for certain reasons.
One of these allowances is a one million annual allowance.
Who does the One Million Annual Allowance apply to?
- Residents over 18 years old qualify for a Single Discretionary Allowance of up to R1 million per calendar year.
- Residents under the age of 18 qualify for an allowance of R200,000.00 per calendar year (for the purpose of traveling only).
- See details here on how the annual travel allowance forms part of this one million rand
Is tax clearance required?
The discretionary allowance does not require any Tax Clearance Certificate for the individual transferring the money.
What is the One Million typical used for?
As a discretionary allowance it is up to the individual but typical uses include:
- maintenance transfers.
- monetary gifts and loans.
- foreign tuition fees.
- weddings and other special occasions.
What is the process for transferring abroad all or part of your discretionary allowance?
The first step is registration with us which is free of charge and carries no obligation with it. You then deposit the funds in the bank account of our approved dealer (Investec) and it is then a simple case of agreeing when you wish to effect the transfer. Note that it is not required for you to transfer 1 million rand all in one go, you can simply use as much or as little of your one million annual allowance as you desire.
Please also note that the allowance is per calender year, this means any part of the one million not used does not carry over, but is lost.
What if you want to transfer more than One Million?
There is a further annual allowance of R10 million rand per adult per calender year that you can also transfer, see here for more details.
How Incompass help
Incompass is the only ISO 9001 and 27001 certified currency introducer in South Africa. We are FSCA approved and all our transactions go through our authorised dealer (Investec).
Our role is simply to ensure you get the best exchange rate, the best service and with the least aggravation. We are proud that most of our clients come from referrals from existing clients and in our preferred supplier status to some of South Africa’s leading investment houses.
To find out more about how we can help you with the transfer of your one million allowance call us on any of the numbers below or send us an e-mail.
Ph: Cape Town +27 (0) 21 424 2936
Ph: Johannesburg +27 (0) 11 234 4275