South Africans who invest money offshore can leave their families with a foreign estate tax bill, even if they never lived in the country where the assets are held. That is the warning from Investec cross-border tax and fiduciary advisers Angelique Stronkhorst and Johanci De Castro Lobo, in a piece published by Daily Investor and republished on 21 September 2026 under the headline “Tax trap for South Africans taking money out of the country”.
The trap the advisers describe
According to the advisers, some foreign jurisdictions tax assets that sit inside their borders when the owner dies, whether or not the owner ever resided there. An investor may therefore not expect the liability, and it arises on death rather than when the money leaves South Africa. The advisers’ conclusion is that anyone thinking of moving funds abroad should talk to a qualified cross-border tax adviser about estate tax in the destination country before transferring assets.
This sits on top of South Africa’s own estate duty. The South African Revenue Service levies estate duty on the worldwide property of a natural person who is ordinarily resident in South Africa, at 20% on the first R30 million of the dutiable estate and 25% on the portion above R30 million. An abatement of R3.5 million is deducted before the duty is calculated. Duty is due within a year of death or 30 days from the date of the assessment, whichever is earlier, and late payments attract interest at 6% a year.
How much can be moved out, and how
The route for moving money out has recently become wider. Finance Minister Enoch Godongwana announced on 25 February 2026 that the single discretionary allowance would double from R1 million to R2 million per person per calendar year, the first increase in about 15 years, according to Daily Investor. The allowance needs no SARS pre-approval and no supporting documents. It had stood at R1 million since 2011, after starting at R500 000 in 2008, and the article said the increase was made to account for inflation and currency fluctuations. The Reserve Bank published draft circulars for public comment first, and the comment period closed on 17 March 2026.
The Reserve Bank put the change into effect through exchange control circulars. Moonstone reported that the bank issued nine circulars on 8 April 2026. Besides the higher allowance, which covers travel, gifts, offshore investments and transfers for residents aged 18 and older, the package raised the limit on cash banknotes taken across the border from R25 000 to R100 000 per person, and lifted the threshold for miscellaneous payments to non-residents from R100 000 to R200 000 per transaction.
Larger amounts go through the foreign investment allowance of R10 million per person a year. That requires an Approval of International Transfer and a tax clearance. Together with the discretionary allowance, an individual can send up to R12 million abroad in a calendar year, and a married couple can each use their own R2 million allowance, giving R4 million between them under the discretionary allowance alone. Allowances reset on 1 January and unused amounts do not carry forward.
Where tax residency and estate planning meet
The two sets of rules deal with different questions. The allowances decide how much a person may move offshore, and the estate rules decide what is taxed when that person dies. Someone who uses the full allowance to buy foreign shares or property has cleared exchange control, but the foreign country in which the asset sits may still claim tax at death, and South Africa may tax the same asset in the estate as well.
Our own coverage of tax and exchange control is in the regulatory and policy and markets and finance sections, and the property section covers offshore purchases.
