How to get SA estate money while residing overseas

Losing a loved one or relative is complicated in and of itself, but additional complications come into play when you inherit and are not in the estate’s country.

The South African law around this has also changed since March 2021, when the Taxation Laws Amendment Act came into effect and terminated what was once known as financial emigration. Before its discontinuance, the law allowed South Africans who were living abroad to declare themselves as a non-resident and thereafter, they were able to transfer their inheritance abroad.

Now, however, things are a little bit different and depending on the total amount of the inheritance, the procedure might differ.

The South African Reserve Bank’s (SARB) requirements for inheritance beneficiaries outside of South Africa:

• If you inherit under R1 million:
  • You can still be a tax resident of SA
  • You can transfer your inheritance through the single discretionary allowance (SDA). The SDA allows South Africans the freedom to transfer R1 million annually without obtaining a Foreign Tax Certificate.

• If your inheritance is over R1 million and under R10 million:
  • You will need to provide a tax number for tax clearance purposes
  • If you don’t have a tax number, you will need to either prove that you are no longer a tax resident and that you are no longer active on SARS’ database or apply for a tax number

• If you inherit under R10 million:
  • You will need to prove that you are no longer a tax resident of SA
  • You can’t be active on SARS’ database

• If you inherit more than R10 million:
  • You will need a letter of compliance
  • You will need to prove that you are no longer a tax resident of SA

If you are not a South African citizen but may have inherited from a South African relative or loved one, you simply need to prove that you are not a South African.

Will I get taxed on my inheritance?

Any taxes incurred on the inheritance will be covered by the estate itself under an estate duty, which means the taxes won’t come out of your pocket. There is also no tax on inherited money, which also means that there will be no Capital Gains Tax (CGT)

How long will it take to receive my inheritance money from South Africa?

Considering the bureaucracy involved in inheritances, the process can be lengthy. The best case scenario could mean that your inheritance will be transferred to you within 6 months, but in reality it could take up to several years before the estate is fully wrapped up.

How long it will take depends on many a factor. Things like the global pandemic could affect the processing time. While Covid-19 may be something of the past, there is still a backlog of documents and estates that need to be wound up as a result of the drastic increase in deaths and lockdown restrictions which led to courts and other bureaucratic offices being closed for extended periods.

The size of the estate and the complexity of the assets and liabilities are additional factors too. If you are thinking about transferring your money to another country, here are some of the benefits of moving your money offshore.