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Consumers advised to utilise their annual offshore forex allowance before year-end
09 November 2017
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While exchange controls still dictate how much South Africans can transfer outside of the country each year, these restrictions have loosened up significantly in recent years and now provide investors with fabulous opportunities to diversify their wealth globally. 

Currency and economic volatility, policy uncertainty and the limited options for investment diversification at home all raise the need for greater offshore planning by South Africans, says Philip Faure, Global Head: Wealth Advisory at Standard Bank Wealth and Investment.

“A single discretionary allowance within a limit of R1 million per calendar year is available to all South African residents who are 18 years and older. This may be used for any legitimate purpose, including for investment, travel, payments or the likes of children’s offshore education. This is at the discretion of the individual without the need for a tax clearance certificate,” says Mr Faure.

“Furthermore, a foreign investment allowance is available through an authorised dealer, which may be transferred to a foreign currency account abroad, within a limit of R10 million per calendar year per individual who is a South African resident, a registered tax payer in possession of a Tax Clearance Certificate and is 18 years and older”.

The annual allowance is available from 1 January until December 31.  It is advisable to start the application process before the end of November.

“A considerable amount of capital can now be taken offshore per annum if you consider making use of the entire family’s offshore allowances. Parents can make loans to children over the age of 18 that are registered taxpayers. A formal loan agreement is advised. It is important to also realise that besides the 2017 allowance expiring on 31 December, the 2018 allowances are available from 1 January”.

Standard Bank FX strategists have kept their year-end 2017 USDZAR targets largely unchanged since late last year. They see the rand remaining around 12.50 to 13.50 into year-end, but still expect USDZAR weakness to around 14.50 by mid-2018, likely due to further country downgrades, before recovering some of the losses. Another risk element to the outlook for the local currency is the substantial foreign investment flows into South African bonds in pursuit of higher yields.  Although this offers stability for the ZAR, these funds can leave our shores just as quickly as it arrived without any change in perceived country risk.

“Standard Bank can facilitate the entire process of utilising offshore allowances, including forex purchases at competitive rates, opening offshore bank accounts with our Jersey office, and facilitating offshore investments through Melville Douglas International and Standard Bank International Fund Solutions,” continues Mr Faure.

“The Shyft app launched in February this year, and the recent winner of the MTN app of the year award, revolutionizes the way an individual can manage their forex”.

“When it comes to the one-million-rand discretionary allowance, this is ground-breaking as it allows individuals to buy, send and store foreign currency anytime, anywhere directly from your mobile phone. The app enables the seamless purchase of USD, EUR, GBP and AUS currencies, with the ability to switch between them at the click of a button. Funds can be used for offshore payments, transfers and online purchases through a virtual online card A Shyft physical card is issued for use whilst travelling.”

The reality is more African families are starting to adopt a global lifestyle and choosing to structure their ambitions accordingly. Standard Bank Wealth and Investment’s integrated onshore and offshore proposition serves these clients across the full spectrum of products and services required in their home territories, as well as internationally.

“Standard Bank Wealth and Investment is extremely well positioned to deliver bespoke wealth management and banking solutions seamlessly, within South Africa, Africa and offshore. But the first step is to not miss out on using your allowance before the year ends – don’t leave it until it’s too late,” concludes Mr Faure.

For more information about Standard Bank Wealth and Investment, its products or service offerings, visit /

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