Moving money offshore

[Merlin]

I, like many, am deeply concerned about the state of this country, and where it appears to be heading in the foreseeable future.

I'm watching future prospects and current worth dwindle on a seemingly daily basis, as local investments stumble, legislation wreaks havoc, and global factors leave their marks.

I am, with much hope, on the path to emigrate next year.

My life's savings will be worth comparatively little on the other side, and are very necessary to get my partner and I setup initially. With no credit record on the other side, what I have, is what we have. Period.

The Rand is taking a hard knock, and I don't feel optimistic about a recovery.

I would like to move my funds offshore, ASAP.

Having read up a fair bit, I'm family with the SDA, etc.

The financial advisors that I've contacted thus far have not really answered my questions, or proposed any particularly helpful solutions.

What are the recommended routes for actioning this?

I know that I can open an offshore account through the local banks, which would still leave me vulnerable to factors just as sanctions, ANC-led government fund raids, etc.

Would an EU-based bank account and a simple transfer do the trick?

Thank you.

 

[TheMightyQuin]

Would an EU-based bank account and a simple transfer do the trick?

Thank you.

Yes it would.

The trick would be opening one and in which country.

Once you have it, it is as simple as transferring your money based on your personal allowance of R1 bar per year.

Local financial advisors will not help you...they want your money. to stay here or at least in a fund where they make money out of it.

How to Open and Manage an Offshore Bank Account

Learn how to open an offshore bank account, explore required documents, benefits, and access methods, and gain confidence in navigating the banking process.

www.investopedia.com

 

[Merlin]

Thanks, MQ.

 

[Candystore]

Yes it would.

The trick would be opening one and in which country.

Once you have it, it is as simple as transferring your money based on your personal allowance of R1 bar per year.

Local financial advisors will not help you...they want your money. to stay here or at least in a fund where they make money out of it.

How to Open and Manage an Offshore Bank Account

Learn how to open an offshore bank account, explore required documents, benefits, and access methods, and gain confidence in navigating the banking process.

www.investopedia.com

Hi, @MightyQuin may I ask a Q? I have a new offshore account. When I transfer funds, I am asked for a BoP (reason for payment). The system suggests that I choose "511-04 - Investment not related to the investment allowance - deposits with a foreign bank".

Does that sound right, though? Is the 1 Bar per annum not exactly that, i.e. the investment allowance - deposit with the foreign bank? They make it sound like my reason for payment is something else?

 

[ThatGuy_ZA]

We emigrated recently so hopefully this will be helpful.

I opened an offshore account with the Bank of Ireland (they let you open these up to 6 months prior to emigration) and I transferred money into it from my FNB account.

You can take up to R1m/year out of the country without needing to jump through hoops. Note this includes all forex transactions so things like Netflix, Spotify, airline tickets may be included in this.

We used currencypartners.co.za to apply for clearance to exceed the R1m/year limit and they facilitated the transfer of funds for us.

Have a look at the funds available on the Allan Gray Offshore Platform - there should be some low risk funds like a USD based money market account that will help your money grow (albeit slowly).

 

[OhYeah84]

You are allowed to transfer R1 million with no questions asked once per year. Anything over this, and up to R10 million will require SARS approval.
We did this and had to do the SARS approval too. Not too much of an issue, but I did it through a reputable financial advisor, and when we sell our house before our move, will have to do the same thing in January 2023.
My suggestion would be to contact an advisor and work through them. Cost me next to nothing to do this and I'll use them again next year.
My money is in an offshore account in USD, and will be moved into a bank account when we leave for the country we are settling in.

 

[OhYeah84]

Hi, @MightyQuin may I ask a Q? I have a new offshore account. When I transfer funds, I am asked for a BoP (reason for payment). The system suggests that I choose "511-04 - Investment not related to the investment allowance - deposits with a foreign bank".

Does that sound right, though? Is the 1 Bar per annum not exactly that, i.e. the investment allowance - deposit with the foreign bank? They make it sound like my reason for payment is something else?

You can move more than R1 million per year, but anything over that and up to R10 million requires SARS being notified. Not sure of anything over R10 million. Not that rich

 

[deweyzeph]

I know that I can open an offshore account through the local banks, which would still leave me vulnerable to factors just as sanctions, ANC-led government fund raids, etc.

This is not true. The offshore accounts offered by FNB Channel Islands, and Standard Bank are full foreign-domiciled offshore accounts. The ANC, government, etc cannot touch them.

 

[Candystore]

You can move more than R1 million per year, but anything over that and up to R10 million requires SARS being notified. Not sure of anything over R10 million. Not that rich

Thanks @OhYeah84 . I just do not know if I am choosing the correct "reason for payment".

 

[Candystore]

This is not true. The offshore accounts offered by FNB Channel Islands, and Standard Bank are full foreign-domiciled offshore accounts. The ANC, government, etc cannot touch them.

I think Merlin is thinking about a foreign currency account, which is different from an offshore account. I cannot quite fathom what the purpose of the former would be.

 

[deweyzeph]

I think Merlin is thinking about a foreign currency account, which is different from an offshore account. I cannot quite fathom what the purpose of the former would be.

The locally domiciled foreign currency accounts are useful for converting small amounts of foreign currency at a time because they are not SWIFT transactions. Once you've accumulated a bunch of locally-domiciled foreign currency you can then use that account to do a SWIFT transfer to your proper offshore account. That's how I do it, anyway.

 

[TheMightyQuin]

Hi, @MightyQuin may I ask a Q? I have a new offshore account. When I transfer funds, I am asked for a BoP (reason for payment). The system suggests that I choose "511-04 - Investment not related to the investment allowance - deposits with a foreign bank".

Does that sound right, though? Is the 1 Bar per annum not exactly that, i.e. the investment allowance - deposit with the foreign bank? They make it sound like my reason for payment is something else?

That code is correct. Are you with FNB?

When selecting that it should ask you if this is Personal Transfer or something like that too. When you select yes...it should display your Tax Number in the small little window there.

 

[Candystore]

That code is correct. Are you with FNB?

When selecting that it should ask you if this is Personal Transfer or something like that too. When you select yes...it should display your Tax Number in the small little window there.

Standard Bank.

Will do a dummy transfer and see what else comes up.

 

[Candystore]

About the discussion up-thread, what are the tax implications if I live in SA but transfer funds to an offshore account from time to time, always adhering to the limit of the amount allowed to be moved offshore per annum?

 

[TheMightyQuin]

About the discussion up-thread, what are the tax implications if I live in SA but transfer funds to an offshore account from time to time, always adhering to the limit of the amount allowed to be moved offshore per annum?

Any money that you have "in your possession" is most probably taxed already in SA. Moving it will incur costs, but no further taxes AFAIK.

 

[deweyzeph]

About the discussion up-thread, what are the tax implications if I live in SA but transfer funds to an offshore account from time to time, always adhering to the limit of the amount allowed to be moved offshore per annum?

No tax implications. Assuming the money has already been taxed, what you do with it is your business.

 

[Candystore]

No tax implications. Assuming the money has already been taxed, what you do with it is your business.

So ... in terms of the laws against double taxation, I will only be taxed on it in SA if I understand correctly?

 

[deweyzeph]

So ... in terms of the laws against double taxation, I will only be taxed on it in SA if I understand correctly?

If you're concerned that the country in which your offshore account is located will try to tax the money, then as long as you can prove where the money came from there shouldn't be any problem. I've been transferring money offshore to the UK Channel Islands for years now, never had an issue with double taxation. I do keep an excellent paper trail though in case anyone should come knocking on my door.

 

[chuckles_the_cnt]

R1 bar per family member ;-)

 

[WollieVerstege]

So ... in terms of the laws against double taxation, I will only be taxed on it in SA if I understand correctly?

The Capital yes, but any interest/income that the money generates could also be taxable in South Africa. I think you'll still need to declare thew interest/income every year on your tax return.