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How to have a South African inheritance paid overseas

Transferring an inheritance from a deceased estate in South Africa to an overseas beneficiary can be confusing and frustrating for both beneficiaries and deceased estate administrators.

At Sable International, we find there are three beneficiary scenarios.

These include:

  1. The beneficiary is a bona fide non-resident,
  2. The beneficiary is someone who has previously financially emigrated from South Africa (when this was still an option), or
  3. The beneficiary is someone who lives overseas, but was born in SA and is categorised as a South African resident temporarily abroad (no matter how long they may have lived overseas).

It is this third scenario which can create the most confusion and where it is important to understand the exact circumstances of the beneficiary.

We outline the process for each scenario, below.

Bona fide non-resident

You qualify for this category if you have never been a South African resident, yet have an inheritance being paid to you in South Africa.

In this situation, securing your inheritance is fairly simple: All you have to do is provide a copy of your country-of-origin ID or passport, and proof of your overseas address.

The passport must say you were born overseas.

This information will prove that you are a bona fide non-resident, and once confirmed, an account will be opened, and the funds will be transferred to your foreign bank account.

The beneficiary has financially emigrated

Claiming an inheritance is equally simple for anyone who financially emigrated before March 2021 and placed their emigration on record with the South African Reserve Bank (SARB).

You must confirm your emigration – either with a letter from the SARB with an ECA reference number or by enquiring directly with the SARB for written confirmation.

The transfer of funds will then proceed as normal – you provide the foreign bank account, and the money is transferred to your account.

However, if you never placed your emigration on record with the SARB or you emigrated after March 2021, it can be a bit more challenging.

South African resident temporarily abroad

In March 2021 the SARB removed this process of financial emigration and placed the onus on tax emigrating or changing one’s status with SARS to non-resident.

There are three scenarios for clients in this situation:

  • If you still have an SA ID book or ID card, and you have not changed your status with SARS to non-resident you can use your R1 million single discretionary allowance – of course this is not the best solution if the inheritance is more than R1 million.
  • If you still have a valid SARS income tax number and you are compliant with SARS, you can also use your R10 million foreign investment allowance and apply for an AIT (Approved International Transfer) tax clearance.
  • For beneficiaries who may have left SA many years ago (for e.g. in 2002), the SARB have amended the exchange control rules to accommodate these beneficiaries and the rules state that private individuals who are no longer tax resident in SA and who are no longer active on SARS registered database can receive an inheritance (or life insurance policy) of up to R10 million. Where the amount is more than R10 million, a manual letter of compliance and tax clearance is required from SARS.

Sable International can help simplify the inheritance process and find the best solution based on the beneficiaries’ circumstances.

Get in touch at [email protected] or give one of our advisers a call on +27 (0) 21 657 2133.


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