Articles

Recent Amendments to South African Exchange Control Limits and Policy

Turnstone News December 2010
By Charles van Staden

As a result of the further steps in the liberalisation of South African Exchange Controls announced by the Minister of Finance in the 2010 Medium Term Budget Policy Statement, the Financial Surveillance Department implemented the following amendments to exchange control limits and policy:

The Single Discretionary Allowance
Natural persons who are 18 years and older may now be permitted to avail a single discretionary allowance within an overall limit of ZAR1 million per individual per calendar year.

The single discretionary allowance may be apportioned as follows:

a) Donations to Missionaries – a letter from an official or recognised religious body is required.

b) Maintenance Transfers – to immediate family who are in necessitous circumstances.

c) Monetary Gifts and Loans – to non-resident individuals or to resident individuals who are temporarily abroad.

d) Travel Allowance – Children under 18 limited to ZAR200 000 per calendar year.

e) Study Allowance.

Individuals may take up to ZAR10 000 in South African Reserve Bank notes with when proceeding on visits abroad. Any unutilised portion of the Single Discretionary Allowance applied for must be resold to an Authorised Dealer in foreign currency on return to South Africa.

Emigrants
The 10% exit levy in respect of liquid assets and/or the export of quoted securities of emigrant’s blocked assets has been withdrawn.

Emigrants may accordingly now apply for the release of funds and/or quoted securities for transfer abroad without having to pay any exit levy. This will apply in respect of transfers in excess of the new limits of ZAR4 million per individual or ZAR8 million per family unit, per calendar year. Tax Clearance Certificates will still be required in respect of the exit of additional emigrant’s blocked funds/quoted securities. In addition, Authorised Dealers may now release emigrant’s blocked funds for local expenditure without restriction.

Donations or gifts in excess of ZAR100 000 received by an emigrant within three years or as capital distributions from Inter Vivos Trusts within three years prior to the date of emigration, will be deducted from the amount to be accorded.

Foreign Capital Allowance for private individuals
The limit has been replaced with a limit of ZAR4 million per individual per calendar year. In addition to the current SADC fixed property dispensation, applications by private individuals to invest outside of SADC, including investment into offshore properties, in excess of the ZAR4 million per annum limit will now be considered.

Talk to a specialist

Charles van Staden

Head of Exchange Control
011 775 6359
E-mail Charles van Staden