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Exchange limits now pitched at the very wealthy
Only 0.5% of the population has controls to heed when taking money offshore, writes LEIGH ROBERTS
The new limits on individual allowances are pitched at such a high level that only the very wealthy remain caught in the official yoke of exchange controls. The new limits are as follows:
Overseas investment allowance You can now invest up to R400 000 in foreign assets (you were previously limited to R200 000), provided you are over 18 years old and you have received a tax clearance certificate from the Revenue Service. This permits a family to take R800 000 overseas under this one-off asset allowance. In a clampdown on taxpayers who take money offshore while their local taxes go unpaid, Manuel imposed the requirement of a tax clearance certificate, rather than the previous declaration by a taxpayer as to their good standing. Given the current sorry state of the Revenue Service, this certificate requirement is likely to cause a delay in getting money offshore. The doubling up of the allowance should kickstart offshore investing by locals. One of the reasons cited for the poor response to foreign investing to date has been that R200 000 was too small to make a meaningful difference to an investment portfolio.
Overseas travel Locals holidaying or doing business overseas can take out R100 000 in a calendar year (previously R80 000). Children under the age of 12 can take R30 000 (previously R25 000). The new allowances mean a family of four, with two teenage children, can take R400 000 each year (previously R320 000). What is sure to please travellers abroad is the abolition of that annoying rule requiring you to sign a form allowing you to use your credit card overseas. According to the Budget Review document, the Reserve Bank will, however, continue to monitor overseas credit card transactions to ensure that citizens do not exceed their limit. (One wonders if the Bank really has the manpower to do this.)
Overseas study You are allowed R100 000 each year (previously R80 000) to pay for your study costs at an overseas institution. Furthermore, you can take a travel allowance of R30 000 (R20 000) each year. If you are accompanied by your spouse these allowances are doubled.
Emigrants If you are jumping the rainbow ship, you will be pleased at the huge increase in the value of goods you can take with you. Previously, an emigrant was permitted to ship out their household goods to a maximum value of R100 000, plus a car (or two) to the same value. Manuel has generously announced that emigrants can now take out their household contents, personal affects and cars to the total value of R1-million. Included in this is the value of your stamps and coins - notable in that an emigrant previously required the specific approval of the Reserve Bank. This allowance excludes Krugerrands. No change was announced to the other emigrant allowance - the settling-in allowance - which is R400 000 in cash for a family, or R200 000 for a single person (this allowance was increased in November last year by the Reserve Bank).
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