Important Amendments To Exchange Control Regulations

The Minister of Finance, Pravin Gordhan, announced some important amendments to Exchange Control Regulations in his Medium Term Budget Policy Statement on 27 October 2009. These primarily increased exchange control allowances from 27 October 2009.

Set out below is a summary of the latest changes to Offshore Allowances:

• The foreign capital allowance for natural persons has been increased from R2 million to R4 million.
• The foreign capital allowance per emigrating family unit has been increased from R4 million to R8 million.
• The single discretionary allowance available to natural persons who are 18 years or older has been increased from R500 000 to R750 000. The allowance is per calendar year and no tax clearance is required. Note, however, you may not leave or invest any of your unused portion – you must bring it back to South Africa on your return. The allowance may only be used for the following purposes: Donations to missionaries Maintenance transfers Monetary gifts and loans Travel allowances Study allowances Note that the travel allowance of R160 000 per calendar year available to natural persons who are under 18 years of age remains unchanged.
• The allowance for investment by South African companies outside the common monetary area has increased from R50 million to R500 million.

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The content of this communiqué is for information purposes only and does not constitute advice in terms of the Financial Advisory & Intermediary Services Act (FAIS). Any opinions expressed are of a general nature only and are not intended for a particular person. Whilst every care is taken to compile the information, no liability can be accepted for any errors, omissions or reliance on the information contained herein.