Using your 500k travel/gift allowance

[Marius & Euneze]

R500k per person, per year - as long as you travel within 60 days of buying the forex or taking your money out.

Thank you JDJ,

Kan ek nog iets vra? Betaal ons belasting op die geld wat ons kry uit die verkoop van ons huis, aangesien ons dit wil oorneem na Australia?

Dankie byvoorbaat!

[JDJoburg]

Thank you JDJ,

Kan ek nog iets vra? Betaal ons belasting op die geld wat ons kry uit die verkoop van ons huis, aangesien ons dit wil oorneem na Australia?

Dankie byvoorbaat!

Die Ontvanger het nie 'n saak met jou emigrasie-planne nie, so dieselfde reels geld as vir enige ander Suid-Afrikaner.

Ek neem aan jy verwys na kapitaalwins-belasting? Onthou, die eerste R1.5 miljoen se wins word nie ingereken nie, mits die eiendom jou woonhuis is, en nie 'n tweede eiendom / beleggingseiendom is nie.

[LeeInOz]

Hey, I never said SARS was efficient!

As far as the travel issue is concerned: if your travel arrangements change, and you will not be travelling within 60 days of purchasing forex, you are supposed to change the forex back into Rands. The fact that no-one noticed or asked you about it does not make it legal. I'm not concerned with your travels being postponed by a month or 2, but if you cancel your travel arrangements altogether and you don't convert your money back into Rands (or transfer it back from your Aussie bank account), then you are in contravention of exchange control regulations, it's as simple as that.

I'm not trying to spoil anyone's fun here guys, but I'm a lawyer and I'm just telling you what the law says. What you decide to do is your choice, just be aware of the risks, and don't think that something illegal becomes legal because you (or someone else) got away with it.

I was not suggesting that anybody break the law of that fine country , the crime rate being so low , but once we had transferrred funds to a bank account in Australia, Inerntational exchange control regulations will not allow any access to the money until you have appeared at the bank, in person with your ID worth 100 points or more.

So rather than pay the ridiculous bank costs to return the money, then wait days for reserve bank approval (a second time) it was easier to just leave things be. In my circumstances I dont think a reasonable person would have done any different.

I am elated however to hear the limit has increased to R500k from the low R165 000.

many thanks for the useful information

[Marius & Euneze]

Die Ontvanger het nie 'n saak met jou emigrasie-planne nie, so dieselfde reels geld as vir enige ander Suid-Afrikaner.

Ek neem aan jy verwys na kapitaalwins-belasting? Onthou, die eerste R1.5 miljoen se wins word nie ingereken nie, mits die eiendom jou woonhuis is, en nie 'n tweede eiendom / beleggingseiendom is nie.

Dankie JDJ

Die eiendom is ons woonhuis en ek is bly om te hoor dat die eerste R1.5m nie ingereken word nie. Ons het nou elke sent nodig soos jy gesien het met my man se blaps oor ons Agreement met ons Sponsor. Die probleem is dat die geld vas is en nie gou gaan los kom nie. Nietemin, dankie vir die inligting.

Euneze

[Almost Aussie]

I am elated however to hear the limit has increased to R500k from the low R165 000.

many thanks for the useful information

It's R500k/pa per person 18yrs+ and R160k/pa for persons under 18yrs.

[Gizmo]

Just remember that:

1. Gifts will trigger donations tax if if excess of R100 000

2. You can only transfer "gifts" to someone who is a resident of Australia, or a South African who is temporarily resident in Australia at the time of the transfer (and not on holiday).

So, your only method - if you're still in SA - would be to transfer to someone who is already resident in Aus, and then only up to R100 000. (more than R100 000 will attract donations tax at 20%.)

Mmmm - I didn't realize that there was a limit of R100 000. Pity.

However, my bank assures me that you don't need to be residing or even on holiday in Australia to receive a "gift". You only need to have a bank account in Aus and you need to have a PR visa for Aus.

[JDJoburg]

Mmmm - I didn't realize that there was a limit of R100 000. Pity.

However, my bank assures me that you don't need to be residing or even on holiday in Australia to receive a "gift". You only need to have a bank account in Aus and you need to have a PR visa for Aus.

Of course you can receive a gift once you've got your PR and is resident in Australia. I'm referring to the situation where you are still here in SA, and trying to get money out via your R500 000 discretionary allowance by paying it into someone else's account in Australia as a "gift" so that they can then transfer it into your Aussie bank account. Such a person must be a permanent or temporary resident of Australia, and not just on holiday there.

I do just have to mention that your bank may be mistaken in advising you that it's OK for someone to pay "gifts" into your Aussie bank account as soon as you have PR in Aus. The SARB exchange control manual states the following:

"Authorised Dealers may allow resident individuals to transfer monetary gifts and loans within the limit specified in point 2.2.2, Section H, per applicant during a calendar year to non-resident individuals and to resident individuals who are overseas temporarily, excluding those residents who are abroad on holiday or business travel"

The problem comes in with the definition of "non-resident" and "resident" - if you are still living in South Africa, then the Reserve Bank will consider you to be "resident" here, despite your Australian PR visa. You would have to be permanently settled in Aus, or you would have to be temporarily residing in Aus at the time that the gift is transferred into your Aussie account, and then not just on holiday. If not, the person who is transferring the money to you will be in contravention of exchange control.

Also remember that transferring your money into a friend's account so that they can then transfer it to your overseas account will leave an obvious paper trail, which can result in your prosecution for exchange control transgressions (and/or donations tax of course).

I know this stuff is incredibly boring (thanks to all who are still awake) but you just need to be aware of all the facts. The banks will often allow all sorts of things to happen (because their officials don't always understand the principles involved), and you may be committing offenses without even knowing about it.

But then, maybe I'm just paranoid - I've studied law for too long to trust anyone (especially banks and insurance companies) to make me feel safe!

Perhaps, in the real world, no-one ever gets into trouble for these things. Feel free to take my neurotic attitude with a pinch of salt...

[bosmans]

Does the 60 day window apply to before and after your travel date?

[JDJoburg]

Does the 60 day window apply to before and after your travel date?

Not sure that I understand your question here. You can make use of your discretionary allowance within 60 days of your travel date; any unused forex must be changed back into Rands within 30 days of coming back.

[bosmans]

Can I still transfer the allowance within 60 days after I left SA to an Aussie bank?

[Gizmo]

Of course you can receive a gift once you've got your PR and is resident in Australia. I'm referring to the situation where you are still here in SA, and trying to get money out via your R500 000 discretionary allowance by paying it into someone else's account in Australia as a "gift" so that they can then transfer it into your Aussie bank account. Such a person must be a permanent or temporary resident of Australia, and not just on holiday there.

I do just have to mention that your bank may be mistaken in advising you that it's OK for someone to pay "gifts" into your Aussie bank account as soon as you have PR in Aus. The SARB exchange control manual states the following:

"Authorised Dealers may allow resident individuals to transfer monetary gifts and loans within the limit specified in point 2.2.2, Section H, per applicant during a calendar year to non-resident individuals and to resident individuals who are overseas temporarily, excluding those residents who are abroad on holiday or business travel"

The problem comes in with the definition of "non-resident" and "resident" - if you are still living in South Africa, then the Reserve Bank will consider you to be "resident" here, despite your Australian PR visa. You would have to be permanently settled in Aus, or you would have to be temporarily residing in Aus at the time that the gift is transferred into your Aussie account, and then not just on holiday. If not, the person who is transferring the money to you will be in contravention of exchange control.

Also remember that transferring your money into a friend's account so that they can then transfer it to your overseas account will leave an obvious paper trail, which can result in your prosecution for exchange control transgressions (and/or donations tax of course).

I know this stuff is incredibly boring (thanks to all who are still awake) but you just need to be aware of all the facts. The banks will often allow all sorts of things to happen (because their officials don't always understand the principles involved), and you may be committing offenses without even knowing about it.

But then, maybe I'm just paranoid - I've studied law for too long to trust anyone (especially banks and insurance companies) to make me feel safe!

Perhaps, in the real world, no-one ever gets into trouble for these things. Feel free to take my neurotic attitude with a pinch of salt...

Thanks JD for explaining! Gosh - it just shows you have to be so careful to check what you are told! I am wondering if it wouldn't be a good idea to hire some lawyers to deal with the transferring money part of our relocation - to make sure that when we are ready to go and are ready to move our money, we do it above board and correctly? Is there such a thing as lawyers who specialize in this JD (sorry if it is a stupid question)?

Edited August 13, 2008 by Gizmo

[JDJoburg]

Thanks JD for explaining! Gosh - it just shows you have to be so careful to check what you are told! I am wondering if it wouldn't be a good idea to hire some lawyers to deal with the transferring money part of our relocation - to make sure that when we are ready to go and are ready to move our money, we do it above board and correctly? Is there such a thing as lawyers who specialize in this JD (sorry if it is a stupid question)?

I don't know, but there are lawyers who do emigrations, so they'd probably know about the financial issues as well. I don't think it's really necessary though - just ask your bank when something seems too good to be true, and then get some feedback on the forum.

I think that you should simply keep in mind that there is no "legal" way of circumventing exchange control requirements - the only question is the likelihood of being caught. Trust you instincts - if you're planning a scheme whereby your money will leave the country under false pretenses (such as having someone pay a "gift" from your own funds into your Aussie bank account) you don't need a lawyer to tell you that it's illegal. The best a lawyer can do is to tell you how likely it is that you'll be caught. And when it's not their butt on the line, they'd probably tell you not to worry! So it's a bit of a minefield, be sensible and rather err on the side of caution.

[Just B]

I realise this is an old post but I have reached that stage and have a couple of questions:

1) If I want to transfer my funds less than R500,000, I go to the bank with my passport (with visa), airtickets and Aussie bank account details and tranfer the money across?

2) Can you make more than one transfer, if it all amounts to less than R500,000?

3) When traveling do carry cash, travelers cheques or a combo of both?

I am flying in 42 days and would like to take advantage of the favorable exchange rate and transfer half now and half later (just before we fly.

Any info is appreciated

Just B

Edited October 13, 2008 by Just B

[ChristineC]

1) If I want to transfer my funds less than R500,000, I go to the bank with my passport (with visa), airtickets and Aussie bank account details and tranfer the money across?

Yes. Phone around to the banks and check the exchange rate they offer and their commission. They can vary quite a bit, but of course if it means transferring your money from one bank to another the delay could work in your favour or against. If you are going to transfer quite a bit, consider using one of the speciality foreign exchange services mentioned on this forum instead.

2) Can you make more than one transfer, if it all amounts to less than R500,000?

Yes.

3) When traveling do carry cash, travelers cheques or a combo of both?

A combo is a good idea, as well as some notes (enough to get you through a day or two in case you arrive at an inconvenient time/day or any other reason). You can also take all your money across in traveller's cheques and deposit it at the bank where you've opened your account (again, compare rates & commissions with direct transfer).

I am flying in 42 days and would like to take advantage of the favorable exchange rate and transfer half now and half later (just before we fly.)

Good idea.

You must just know that you will kick yourself whether the Au$ gets stronger ("I should have bought all my Au$'s as soon as possible") or gets weaker ("I should have waited until the last minute to exchange all my money")

-Daniel

[Guest May]

Standard Chartered Bank, South Africa uses Treasury One, they have been around for a while and I guess are many ex-bank trading staff who no longer can find work in the mainstream job market ie they are not new South Africans.(I am being blunt). If you go onto their website they are a small operation but very approachable.

[Xiongpaw]

Hi everyone

This is quite an interesting thread.

I was not aware of the R100k cap on gifts/donations...

The info regarding the 1.5M exception from tax on gains from the sale of your primary residence is also good news! (thanks JDJoburg)

I have some questions for the experts:

If one goes the investment route (Tax Clearance Certificate & Reserve Bank Approval), then:

1) Do you have to "invest" the money in Oz, or can you just leave it in your bank account in Oz?

2) How long is the SARS Tax Clearance Certificate and Reserve Bank Approval valid for? Can I make multiple payments to Oz during the validity period, or is it a one-shot affair?

3) If I'm not going immediately, and the certificate / RB approval expires, can I apply for another set, and send more money later?

On the gift option:

1) If you send a gift to someone resident in Oz - will they be in risk of having to pay tax on the money received? (come under suspicion, etc) - (ok - this might be a hard one...)

2) Then - last question: This Treasury One which everyone keeps talking about - what is the company's URL?

Google suggests: www.treasuryone.co.za; is this the same company? Judging by their products and services page - they seem more geared to corporate affairs... Do they also cater for private / once-off forex transactions?

General Question:

1) In South Africa, if you are married out of community of property, is there any amount you may give to your spouse without having to pay tax on? if so - would one need to declare this in a tax return? (or is this part of the R100k/year "gift" limit?)

Any info would be appreciated.

Thanks

Edited October 27, 2008 by Xiongpaw

[ChristineC]

I have some questions for the experts:

If one goes the investment route (Tax Clearance Certificate & Reserve Bank Approval), then:

1) Do you have to "invest" the money in Oz, or can you just leave it in your bank account in Oz?

2) How long is the SARS Tax Clearance Certificate and Reserve Bank Approval valid for? Can I make multiple payments to Oz during the validity period, or is it a one-shot affair?

3) If I'm not going immediately, and the certificate / RB approval expires, can I apply for another set, and send more money later?

I'm certainly no expert, but here's my 2c worth:

1) You can put your money in a bank account, stocks, bonds, pork-belly futures, a hand of poker or whatever else you want. And once it's offshore you can move it around freely from one investment/account to another.

2) One year from date of issue (as far as I remember). You can transfer the money over in bits and pieces as it suits you.

3) No: Use it or lose it.

But check with your bank, SARS and/or your financial advisor before you rely on this information.

Hope this helps

-Daniel

Edited October 28, 2008 by ChristineC