February 09, 2026
2026 Annual Allowances: SDA Relief Explained
As we step into 2026, now is the time to make sure you’re using your full annual allowances — strategically and compliantly.
Recent updates from the South African Reserve Bank (SARB) have introduced greater flexibility for certain cross-border transfers, creating new opportunities for individuals looking to move funds offshore.
Here’s what you need to know: a clear breakdown of your annual allowances, plus the key SARB concessions that could make your offshore planning smoother this year.
Understanding Your 2026 Annual Allowances
South African residents continue to have access to two primary annual allowances, though the process for exceeding these limits has recently been refined by the South African Reserve Bank.
1. Single Discretionary Allowance (SDA)
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- This allowance permits individuals to transfer up to R1 million per calendar year offshore without prior approval from the South African Revenue Service (SARS) or the South African Reserve Bank (SARB).
- It can be used for travel, gifts, investments, or other purposes.
2. Foreign Capital Allowance (FCA): for Larger Offshore Investments
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- In addition to the SDA, individuals can transfer up to R10 million per calendar year offshore for investment purposes.
- This allowance requires a specific tax clearance certificate from SARS for foreign investment.
3. Special Approval Applications
It is possible to externalise amounts greater than the combined value of your SDA and FCA allowances by making a special approval application to the SARB.
What’s Changed?
Effective February 2026, Exchange Control Circular No. 1/2026 introduces greater flexibility for resident individuals who have exhausted their R1 million Single Discretionary Allowance (SDA).
Previously, once the R1 million SDA limit was reached, all subsequent offshore transfers required a SARS Tax Compliance Status (AIT) PIN, regardless of the purpose.
Under the new regulations, the South African Reserve Bank (SARB) now distinguishes between Current and Capital transfers. Certain “Current Account” payments can now be processed beyond the SDA limit without the need for a SARS AIT PIN.
Current vs Capital Transactions: A Quick Guide
The requirement for a SARS AIT PIN now depends strictly on the nature of the transaction.
Examples of Current and Capital Transfers
- Current transfer: School fees, travel expenses, living costs, or bona fide gifts.(No SARS AIT PIN required. Subject to SARB approval.)
- Capital transfer: Offshore investments, moving savings, or externalising assets. (SARS AIT PIN remains mandatory.)
How to Utilise This Change
While the requirement for a Tax Clearance PIN has been waived for current expenses, the SARB still requires verification of the transaction’s legitimacy. To facilitate these transfers, you will need:
- A Motivational Letter: Confirming the SDA has been exhausted and detailing the “current” nature of the expense.
- Supporting Documentation: Invoices or statements (e.g., tuition bills or travel itineraries) to verify the destination of funds.
How We Can Help
Navigating SARB motivations can be complex. Our team is available to assist in structuring your application to ensure it meets all regulatory requirements for a seamless approval.
If you have upcoming transfers or would like us to review your 2026 offshore requirements, please contact your dedicated dealer or email us at quotes@currencypartners.co.za.
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