Using your R1 million discretionary + R10 million foreign investment allowance properly

Every South African tax resident over 18 gets two separate ways to move money offshore legally. Understanding the difference saves tax, hassle, and often thousands in unnecessary fees.

The R1 million discretionary allowance

No SARS clearance required. You can move R1 million per calendar year simply by doing an online balance-of-payments declaration with your bank. Includes travel, gifts, and investments. Most people use it to buy global ETFs via platforms like EasyEquities or Shyft.

The R10 million foreign investment allowance (FIA)

Requires a SARS Tax Compliance Status (TCS) pin first. Once approved you can move an additional R10 million per year (R11 million total). Many high-net-worth individuals use this route for larger offshore portfolios.

Tax treatment — the big difference

Money moved via the discretionary allowance is treated as if it came from after-tax income — no further tax when you bring it back.
Money moved via the FIA is treated as capital. When you repatriate it later you may trigger capital gains tax if the rand has weakened.

The simplest offshore strategy most people use

1. Max your tax-free savings account with a global ETF (counts as local investment).
2. Use your R1 million discretionary allowance every year to buy the same global ETF via EasyEquities or your bank.
3. Stay within Regulation 28 limits in retirement funds (most already have 30–45 % offshore).

This approach gives the average South African household meaningful global diversification without SARS paperwork, without estate duty complications, and without paying expensive “offshore feeder fund” fees.

Final thought

Offshore investing isn’t about “getting money out” — it’s about sensible diversification. The rand has lost roughly 8 % per year against the dollar over the past decade. Having 20–40 % of your long-term money in hard currency assets is simply prudent risk management for any South African investor.