January 22, 2025
Maximising Your Annual Allowances in 2025
As we enter 2025, it’s important to revisit the annual allowances available to South African residents and ensure you’re making the most of these opportunities while remaining compliant with regulatory requirements. This guide will provide an overview of the allowances, key deadlines for the year, and the steps you need to take to streamline the process.
Understanding Annual Allowances
South African residents are granted two primary annual allowances for transferring funds abroad:
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)
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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.
Combined, these allowances enable South African residents to transfer up to R11 million annually offshore.
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.
Key Considerations:
- The Foreign tax clearance is valid for 12 months from date of approval, so applying now means you can draw down on the balance over the next 12 months.
- You do not need to redeem your investments and have the funds reflected in an account to apply for the tax clearance certificate. You can apply using your investment statements while remaining invested.
- Provisional Tax Deadlines for 2025 (for High Net-Worth Individuals):
- 28 February 2025 – 1st Provisional Payment for the 2025/2026 tax year
- 31 August 2025 – 2nd Provisional Payment for the 2025/2026 tax year
How we can help
At Currency Partners, we specialise in simplifying the complexities of foreign exchange and annual allowances. Our team can assist you with:
- Complimentary tax clearance certificate
- Ensuring compliance with exchange control regulations.
- Dedicated dealing to help you manage currency risk by securing exchange rates in advance.
- Local and international cash management accounts.
Plan Ahead: Make the Most of Your 2025 Investment Opportunities
2025 presents an excellent opportunity to diversify your investments and plan for the future. By starting early and working with experienced professionals, you can avoid the stress of last-minute submissions and ensure your offshore transfers are handled seamlessly.
Contact us today to discuss your annual allowance needs and let us guide you through every step of the process.
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