The foreign capital allowance (FCA of FIA being Foreign Investment Allowance as referred to by SARS) allowing tax compliant SA resident individuals 18 years and older to transfer a once in a life time R2m (2006) into a foreign currency, has been doubled to R4m (October 2009). The SARS policy document and the FIA001 or FIA 002 application forms to be used, has not changed.
Residents (natural persons), who are over the age of 18 years may be permitted to avail of a single discretionary allowance within an overall limit of R750 000 (new limit 2009, was R500 000 since 2008) per individual per calendar year, without the requirement to obtain a Tax Clearance Certificate, which may be apportioned as either Donations to Missionaries, Maintenance Transfers, Monetary Gifts and Loans to South Africans living abroad, Travel Allowance and or Study Allowance.
A further increase in the FDI outward investment limit from R50m to R500m has also been announced.
Applications below the R500m limit will be processed by authorised foreign exchange dealers (banks), subject to all existing criteria and reporting obligations.
Read more on Hugo’s webpage – Exit South Africa, which includes a link to circular 13 of 2009
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During February 2009 the then Minister of Finance announced SARS wish to
reduce the tax and compliance complexity associated primary residences and the
Capital gains tax issues they face.
A further "amnesty" became law on 30
Your primary residence or family home is registered in a company, cc or
trust and you or your spouse the shareholders or funders of the trust? SARS
has finally extended the CGT and transfer duty or than the tax-free transfer of
a primary residence from a trust or company to the beneficiary or shareholder
and/or his or her spouse.
Certain very important and critical requirements must be fulfilled and
then the primary residence may be transferred out of the "wrapper"
without incurring transfer duty, secondary tax on companies and capital gains
tax. This concession takes effect on 11 February 2009 (the date the property
needs to be your primary home) and ends on 31 December 2010. The lawyers
transfer fees and bond registration fees will have to be paid as per normal.
On 30 September another empowering law was promulgated and a full CGT exclusion
will now apply to a primary residence up to a gross value of R2 million.
Neither tax residents nor tax non-residents previously residing in their
primary residence need to worry about CGT or the CGT withholding taxes
applicable to expats now living in say Australia.
In short, should primary residence / home (as defined) but NOT your
holiday home has a gross value of less than R2 million, you can sell it without
worrying about CGT where as the homes sold for in excess of R2m will still
qualify for the R1.5m primary residence CGT exclusion.
Need more information? Make
contact with Hugo