There are three ways in which South Africans living abroad can claim their inheritance, according to Tim Powell from Sable International.<\/p>\n
The three scenarios depend on the statuses of the beneficiaries.<\/p>\n
The first scenario is for a bona fide non-resident who was born overseas and has never been a South African resident.<\/p>\n
This payment requires the beneficiary to provide a copy of their country of origin ID or passport and proof of their overseas address.<\/p>\n
Scenario two is for beneficiaries who formally emigrated from South Africa, i.e. financially emigrated pre-March 2021.<\/p>\n
In this scenario, the beneficiary was once a resident of South Africa but has since emigrated and placed their emigration on record with the South African Reserve Bank (SARB) – this stopped being an option in March 2021.<\/p>\n
Powell said that the\u00a0inheritance can be paid to the beneficiary overseas via the beneficiary simply providing confirmation of their emigtation – usually a letter from the SARB with an ECA reference number.<\/p>\n
On the other hand, an enquiry can be made to SARB to confirm a beneficiary’s emigration and, when the confirmation is received, proceed with the transfer of funds.<\/p>\n
The third and most common scenario is when a beneficiary left South Africa but did not place their emigration on record with the SARB and may or may not have tax emigrated. There are two solutions for this scenario.<\/p>\n
Suppose the beneficiary still has an SA ID book or ID card. In that case, they can make use of their R1 million single discretionary allowance and, if they still have a valid SARS income tax number and their SARS profile is up to date, they can apply for foreign investment tax clearance and utilise their R10 million foreign investment allowance (FIA) and send their inheritance offshore.<\/p>\n
However, the beneficiary can only use their R1 million single discretionary allowance if they have not tax emigrated.<\/p>\n
Alternatively, the beneficiary could use solution 2. If the client has either tax emigrated or is no longer a tax resident and not on the SARS database, then SARB Circular 8 is applicable.<\/p>\n
SARB Circular 8 was introduced in May 2021, after the ending of the financial emigration system, to specifically address a scenario where a beneficiary of a deceased’s estate in South Africa living overseas inherits or is the death beneficiary of South African policies up to R10 million and have no other remaining assets in South Africa and no SARS tax profile.<\/p>\n
Powell said that the solution will apply to more South Africans living overseas, and there are many factors to consider.<\/p>\n