The R4 million which South African taxpayers are allowed to invest offshore in your lifetime will be increased to R10 million per taxpayer or R20 million per family in terms of the Budget proposals.
This foreign capital allowance also applies to the amount you can take out on emigration. In addition to this lifetime limit, you are entitled to take R1 million a year overseas as a discretionary allowance meaning that you don’t have to apply for a tax clearance for this amount. This amount has not been changed.
Later this year changes to the Estate Duty Act will be proposed in order to prevent you from making large lump sum contributions to a retirement annuity in order to reduce or avoid estate duty.
Because of the exemption on proceeds from a retirement annuity and living annuity from estate duty after death and because of the removal some years ago of the age limit after which one may not contribute to a retirement annuity, many taxpayers were being advised to make large contributions to their RA’s late in life to save their families estate duty.
Revenue has now become aware of this trend had has decided to close this loophole later this year.
