Harry Scherzer | CEO | Future Forex | mail me |
The amount South African residents can send offshore without South African Revenue Service (SARS) clearance has remained unchanged since 2011. However, that is about to change.
On 25 February, Finance Minister Enoch Godongwana announced that the Single Discretionary Allowance (SDA) will increase from R1 million to R2 million per person each calendar year. This marks the most significant overhaul of exchange control policy in almost 15 years and substantially expands offshore transfer limits.
The South African Reserve Bank (SARB) has already published draft circulars to formalise the change. In addition, the public comment period closed on 17 March 2026. Although SARB has not yet issued the final circular confirming the effective date, implementation is widely expected by late March or early April.
For now, most banks still apply the existing R1 million limit. Once the new threshold takes effect, however, offshore transfer limits will change significantly for individuals and households.
You can move R2 million offshore without asking SARS first
Under the current system, South African residents aged 18 or older may transfer up to R1 million abroad each calendar year without requiring a Tax Compliance Status (TCS) PIN from SARS.
Once the new rules take effect, this limit will double to R2 million. As a result, individuals will not require pre-approval, special applications, or supporting documents. Instead, account holders simply instruct their bank to process the transfer.
For married couples, the benefit becomes even greater. Since each spouse receives an individual allowance, households will effectively gain access to a combined offshore transfer allowance of R4 million annually under the SDA alone.
The total annual offshore allowance increases to R12 million
The SDA works alongside the Foreign Investment Allowance (FIA). The FIA allows individuals to transfer up to R10 million offshore annually. However, applicants must obtain an Approval of International Transfer (AIT) and full tax clearance from SARS.
Because the SDA has doubled, an individual’s total annual offshore transfer capacity will now increase to R12 million. This includes the R2 million SDA and the R10 million FIA.
Previously, the combined allowance totalled R11 million. This increase creates a meaningful advantage, particularly for individuals who want to transfer moderate amounts offshore quickly and with minimal administrative delays. In addition, higher offshore transfer limits create more flexibility for investment diversification and international financial planning.
A weaker Rand makes a higher threshold more important
The timing of this increase coincides with renewed pressure on the rand. Since the US-Israeli strikes on Iran began on 28 February, oil prices have surged towards $110 per barrel.
At the same time, global risk appetite has weakened sharply. Consequently, the Rand has depreciated by approximately 5.8% over the past month. By the end of last week, it traded near R16.95 against the US dollar. For a net fuel importer like South Africa, this combination creates substantial economic pressure.
In practical terms, a weaker Rand means R1 million now purchases fewer dollars, pounds, or euros than it did only two months ago. Therefore, increasing the SDA to R2 million does more than reduce paperwork. It also allows individuals to move more meaningful sums offshore during periods of currency weakness. People may use these funds for investments, education, emigration planning, or preserving purchasing power.
When the Rand weakens, your offshore allowance shrinks in real terms. A R1 million transfer bought you roughly $63,000 at the start of the year. Today it’s closer to $59,000. Doubling the SDA restores the flexibility South Africans need to make offshore transfers that are more substantial.
This is a correction
Authorities introduced the SDA at R500,000 in 2008 and later doubled it to R1 million in 2011. However, regulators left the threshold unchanged for almost 15 years. Over time, inflation and Rand depreciation steadily eroded the allowance’s real value. By 2026, the purchasing power of R1 million had effectively halved compared to 2011 levels.
The new R2 million threshold largely restores the original purchasing power. In addition, the National Treasury’s Annexure E confirms that authorities introduced the increase to account for inflation and currency fluctuations.
Treasury also committed to reviewing offshore transfer limits regularly in future. Although welcome, this adjustment arrives long overdue.
The timing is unusually favourable
South Africa’s fiscal position has improved more during the past 12 months than during the previous decade. After the country exited the Financial Action Task Force (FATF) grey list in October 2025, South Africa secured its first credit rating upgrade in 16 years.
This improvement gave Treasury enough confidence to withdraw R20 billion in planned tax increases. In addition, authorities finally adjusted income tax brackets for inflation.
For individuals considering offshore diversification, these developments create an unusual alignment. Investors now face a more stable fiscal environment, a friendlier regulatory framework and expanded offshore transfer limits simultaneously.
In conclusion
We recommend holding at least 50% of wealth offshore to protect against Rand depreciation and global uncertainty. Many South Africans tend to wait for the perfect moment to move money offshore, but the perfect moment is usually the one you missed.
A friendlier regulatory environment and a doubled SDA don’t come around together very often. It’s better to utilise your offshore allowance consistently each year instead of trying to time the currency.
Banks and forex providers still await the final SARB circular before processing transfers under the new R2 million threshold. Importantly, the allowance resets every January, and unused portions do not carry over. Therefore, individuals effectively face a “use it or lose it” situation.
