Forex case study: planning for future inheritance from South Africa

Martha and Jonathan live in South Africa and have a son, Tom.

Tom is a globetrotter. He worked in South Africa for a few years. Then moved to the UK. Then moved to Australia.

Martha and Jonathan are concerned about what happens when they pass away. How will Tom inherit their significant estate?

How Tom is able to claim his inheritance will depend on a few factors, so our out of South Africa forex team starts by sending Tom a questionnaire to gather more details from him.

 

These answers help us determine what options are available to Tom in terms of exchange control.

Some of the variables to consider include:

• Amount of inheritance
• Does he still have a tax profile with SARS?
• Does he have a green barcoded SA ID or the new SA ID card?
• Are there will trust or intervivos trust distributions?

Let’s say Tom left South Africa a long time ago. SARB has a provision that inheritances of up to R10 million can be paid to overseas beneficiaries, subject to them providing certain information and signing a declaration, if they are no longer active on the SARS registered database.

In this scenario, the parents mention a “significant” estate. The key is whether it is greater than or less than R10 million.

Does Tom need to financially emigrate?

The South African Reserve Bank has removed the process of financial emigration, so it is no longer an option for Tom. The onus is now on Tom (the beneficiary) to ensure he is compliant with SARS in order to receive any inheritance (and any trust distributions, if applicable). This might mean that he has to tax emigrate and close his profile with SARS before he can inherit.

If Tom doesn’t plan to return to South Africa, he should tax emigrate sooner rather than later, to reduce the amount of admin he needs to deal with in the event of his parents passing.

See also: How to claim your South African inheritance when you live overseas

There is always a solution and that is where we work with the executors, administrators and beneficiary to determine options available to them.

We’ve been helping individuals and businesses make international transfers out of South Africa for over 20 years. For help receiving a South African deceased estate as an expat, you can get in touch at estates@sableinternational.com or give one of our advisers a call on +27 (0) 21 657 2133.