Forex allowance for a child

[arabella164]

How does one go about doing this?

I have taken out my R160000. My child does not have R50000 in her account, but I do in mine. I wish to take transfer the extra R50000 (child's allowance) from my SA account into the Australian account I gave just opened.

How can I do this legally without upsetting SARS?

[Mikej]

Is it legal to have a bank account is Australia if you still live in SA?

[Guest Bronwyn]

As far as I am aware you can just transfer the R50k for your child. In other words the money goes from your SA Bank account to your Aus Bank account, but with your child's name on the forms. Children 12 years old and over get an adult allowance of R160k. Children under 12 can only take R50k. This is known as the Travel Allowance and may be done once a year, if you have an airticket from SA to AUS and a valid Visa.

You will need the child's passport/visa and ticket to show the Forex people at the bank. They will make copies. You will need the bank account details in Aus, including your Bank's BSB (Branch Code) and Swift code (This is an International Code all banks have to facilitate international transfers).

Yes you are allowed to have an overseas bank account if you live in SA, but Exchange Control will document all money you send out of the country by asking you to complete a BOP (Balance of Payments) form when you do the transfer. This is so they can documents stats for Macro-economic reporting purposes.

You can download an 'Application for a non-resident Bank Account' from www.anz.com and complete and post back to ANZ. In about 2-3 weeks you will get a letter with your new bank account number. I'm sure this is available with ther banks too, not just ANZ.

Please remember - because no-one will tell you - when you get to Australia you MUST take your Tax File number into the bank so they can load it on their system, or else 50% of your credit interest will be withheld as the maximum non-resident tax. You can do this at the same time you do your 100-point check at the bank to identify yourself and get the accounts active.

Check the credit interest rate you will be earning. It should be at least 5,8% pa to 6,5% pa plus, on that sort of amount. If it is lower, you must then request to transfer the money to an interest-bearing account. You can only do this once your main account is open and the forms are all with the bank. We actually phoned from PTA to Melbourne and they opened us a type of Savings account called a V2Plus over the phone. We lost a lot of interest because I didn't realise we were earning less than 1% in a normal current account.

Hope it helps, Bronwyn

Edited October 8, 2007 by Bronwyn

[MzT]

My child does not have R50000 in her account, but I do in mine. I wish to take transfer the extra R50000 (child's allowance) from my SA account into the Australian account I gave just opened.How can I do this legally without upsetting SARS?

I would check with an accountant on this one. I'm not sure if it's as simple as just transfering the money into your child's account and it may cause problems down the line. There is a certain amount that you can give to your children per year as a gift which will raise no suspicion, but I don't think it's R50 000. I may be wrong and it might just be a case of transfering into her account and sending it over, but I don't think so. Good luck.

[Guest Bronwyn]

We took the total for our family, out of my Bank account. The money did not actually belong to the kids, but was the proceeds of the sale of our house. In that case there was no capital gains tax issue, etc.

Presumably the money has already been taxed.

It can't hurt to check with an accountant, and always keep records.

[MzT]

Thanks Bronwyn, that makes it simple then

[arabella164]

Thanks Bronwyn, that makes it simple then

Managed to do it quite easily through my bank via an electronic SWIFT transfer from my local account to my new Oz account.

You may need to provide the following documents to load your child onto the bank system:

An original utility bill in your name.

An originally certified copy of your daughters passport

A copy of the attached co-habitation document.

For the actual transfer, the following need to be provided:

BOP form (Balance of payment/Forex purchase form)

Travel declaration

Copy of passport

Copy of air ticket

Money is then taken from your account, but is allocated against your child's travel allowance.

Edited October 16, 2007 by mohammedm