With international travels on many a South African agenda these Christmas holidays, making sure that you have enough of the local currency on hand has become a top priority.<\/p>\n
However a number of confusing laws surrounding age and amounts means it is not always clear how much you are allowed to take with you on your trips.<\/p>\n
With this in mind, Cliffe Dekker Hofmey’s Louis Botha laid out what you need to know before heading out this December.<\/p>\n
General rules regarding the granting of travel allowances<\/strong><\/p>\n All South African persons who are 18 years or older, are entitled to make use of the single discretionary allowance (SDA).<\/p>\n The SDA comprises an amount of R1 million per calendar year<\/strong>, which any South African resident (18 years or older) may use for any legal purpose abroad, without obtaining a tax clearance certificate. South African residents who are under the age of 18 years, may be granted a maximum annual travel allowance of R200,000 per calendar year<\/strong>.<\/p>\n “From a practical perspective, this means that if, for example, persons have used R100,000 of their SDA during any calendar year before going on their December holiday, they may in principle apply to take foreign currency up the value of R900,000 abroad,” said Botha.<\/p>\n “It is important for South African residents to keep track of the amount of their SDA that they have used in a calendar year, as exceeding their SDA will constitute a contravention of the regulations,” he said.<\/p>\n “In terms of the Currency and Exchanges Manual for Authorised Dealers (AD Manual)<\/strong>, which must be read with the Exchange Control Regulations, 1961 (Regulations), persons may take foreign currency up to the limit of their SDA, ie R1 million, abroad in the form of travel allowances.”<\/p>\n Travel allowances may be taken abroad in the form of foreign currency banknotes, travellers cheques or may be transferred to the traveller\u2019s own bank account or to the traveller\u2019s spouse\u2019s account, but not to a third party\u2019s bank account. Minors\u2019 travel allowances may also be transferred to their parents\u2019 bank accounts abroad.<\/p>\n Furthermore, travellers may also use their credit or debit cards to pay for travel expenses abroad, within their annual SDA limit, he said.<\/p>\n Documentation and provision of foreign currency prior to travel<\/strong><\/p>\n Botha noted that there are separate regulations for purchasing currency\u00a0outside the Common Monetary Area (CMA) – which consists of Lesotho, Namibia, South Africa and Swaziland<\/strong>, they must produce their passenger tickets.<\/p>\n “In such instances, they may not be furnished with foreign currency more than 60 days prior to the date of departure, unless the funds are to be used for business travel or land arrangements,” he said.<\/p>\n “Land arrangements refer to expenses related to tours, hotel accommodation and vehicle rental, which are made at the request of South African resident travel agents or tour operators.”<\/p>\n When making use of their SDA to apply for a travel allowance, prospective travellers must provide the authorised dealer with a written undertaking that they will:<\/p>\n Permissible use of travel allowances<\/strong><\/p>\n Although it might not be common knowledge, South African residents should be aware that any amounts taken or transferred abroad for purposes of travel may not be used for any other purpose, in terms of Regulation 2(4), said Botha.<\/p>\n Once a person has returned to South Africa from overseas travel, they must resell any remaining foreign currency to an AD or ADLA within 30 days, in terms of Regulation 2(5) read with Regulation 6(1).<\/p>\n “From a practical perspective, this means that if a person travels abroad with his family and has a foreign bank account, he may not deposit any unused portion of his travel allowance or any of his family members\u2019 travel allowances into his foreign bank account and use it for investment purposes,” Botha said.<\/p>\n “Where any portion of an amount granted as a travel allowance is used for investment purposes in this manner, the funds and the growth on such funds, will constitute an unauthorised asset held in contravention of South Africa\u2019s exchange control laws. A South African resident may have to pay a fine on such assets, or worse, forfeit the unauthorised asset and face criminal prosecution.”<\/p>\n “With regards to Regulations 2(5) and 6(1) referred to above, business travellers who go on a business trip within 90 days of returning to South Africa from a previous business trip, may retain such foreign currency to use during the next business trip.”<\/p>\n “Where persons have returned to South Africa from travelling abroad and have resold the unused portion of their travel allowance to an AD or ADLA, as required, they may use such amount at a later stage during the calendar year, as part of their SDA,” he said.<\/p>\n\n
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