Good news for South Africans taking money out of the country

While a new Reserve Bank update lets South Africans send transfers above R1 million without SARS clearance, taxpayers now face tighter scrutiny and must ensure proper documentation to avoid delays or blocked funds.

This was explained by Tax Consulting SA’s Team Lead of Tax Legal, Micaela Paschini, and Senior Attorney of Exchange Control & SARS Engagement, Michelle Phillips.

On 7 January 2026, the South African Reserve Bank (SARB) announced that the headline annual transfer limit of R1 million, without requiring South African Revenue Service (SARS) tax clearance, remains unchanged.

This allows for greater flexibility for bona fide current transfers above the R1 million annual threshold, Paschini and Phillips said.

However, they cautioned that the practical reality for resident individuals wishing to send funds offshore has shifted.

“The update introduces broader flexibility for bona fide current transfers exceeding R1 million, while simultaneously reinforcing strict controls where capital transfers are involved,” they said.

Paschini and Phillips stressed that for taxpayers and advisors alike, understanding this distinction is critical.

Under the Exchange Control framework, South African residents aged 18 and older may use their Single Discretionary Allowance (SDA) of up to R1 million per calendar year to remit funds abroad for any lawful purpose.

This includes travel, gifts, and certain investments. Historically, any transfer exceeding this threshold required Tax Compliance Status (TCS) approval from SARS, regardless of its nature.

Now, Exchange Control Circular No. 1 of 2026 has changed this position in a targeted way. The SARB has now confirmed that additional transfers above R1 million will not automatically require a SARS TCS, provided that the transfer is:

• Of a current nature, and
• Supported by proof of its bona fide purpose and legitimacy

“These requests will instead be considered directly by the SARB’s Financial Surveillance Department (FinSurv), subject to verification,” Paschini and Phillips said.

Capital transfers face scrutiny

Importantly, Paschini and Phillips pointed out that the relief introduced by the Circular does not extend to capital transfers.

“Where an individual seeks to externalise funds of a capital nature above the R1 million SDA, the existing rules remain intact,” they said.

In such cases, a SARS TCS is still mandatory in terms of section B.2(B) of the Currency and Exchanges Manual for Authorised Dealers.

In practice, this means that current transfers may qualify for SARS approval without a TCS, even for amounts above R1 million.

“However, capital transfers, including offshore investments of a capital nature, remain subject to full SARS clearance before funds may leave South Africa,” they said.

“Misclassifying a transfer can result in delays, rejection by the bank, or additional scrutiny,” they warned.

Circular 1 of 2026 places a renewed compliance burden on Authorised Dealers. Banks are now required to independently verify the bona fide nature and legitimacy of current transfers above the SDA limit.

Banks must also ensure that the correct balance of payments category is reported on the FinSurv Reporting System.

“From an individual perspective, this means that although a SARS TCS may no longer be required in certain cases, documentary substantiation has become even more important,” Paschini and Phillips said.

“Banks retain discretion and will not process transfers without adequate supporting evidence.” They cautioned that while the Circular introduces flexibility, it does not represent a relaxation of exchange control oversight.

Instead, it reflects a recalibration of regulatory responsibility between SARS and SARB. Individuals should be aware that:

• Exceeding the R1 million SDA will almost certainly trigger enhanced scrutiny
• Banks may apply differing internal risk thresholds
• Poorly structured applications can still result in funds being blocked

Paschini and Phillips stressed that advance planning and proper classification of the transfer are essential.

“With increased coordination between SARB, SARS and financial institutions, offshore transfers are now assessed through a more sophisticated compliance lens,” they said.

“Whether a TCS is required or not, delays often arise because applications are lodged too late or without adequate substantiation.”

“Proper structuring can mean the difference between a seamless transfer and months of regulatory delay.”