Understanding how to legally move money out of South Africa can feel overwhelming, especially
when acronyms like “SDA”, “SARB” and “SARS” enter the picture. If you’re wondering what the
single discretionary allowance actually is — and how it affects your ability to transfer funds offshore — this guide breaks down everything you need to know.
Below, we unpack the single discretionary allowance, who qualifies, what you can transfer, and why
it matters whether you’re a tax resident or not.
Single Discretionary Allowances Explained
The single discretionary allowance (SDA) is an annual allowance granted by the South African
Reserve Bank (SARB) and that allows South African tax residents (aged 18 or over) with a bar coded
South African identity book/smart card, to transfer up to R1 million per calendar year abroad
without needing tax clearance from SARS.
The SDA is intended to simplify smaller foreign transfers such as gifts, travel expenses, offshore
investments, and general allowances. The SDA is separate from the Foreign Investment Allowance
(FIA), which has different requirements and limits.
For anyone planning to move money out of South Africa — whether emigrating, investing, or
supporting family abroad — understanding the SDA is essential.
At Rand Rescue, we can assist you with the entire process and ensure full compliance every step of
the way.
What Is The Single Discretionary Allowance?
The single discretionary allowance is a regulatory mechanism designed to make foreign currency
transfers easier for South African tax residents. Under the SDA, qualifying individuals may transfer
up to R1 million per calendar year without obtaining the relevant tax compliance status (TCS) pin or
tax clearance from SARS. This allowance covers a wide range of personal foreign transactions,
including travel expenses, gifts, certain global investments.
The SDA is intended to streamline smaller transfers so that individuals don’t need to go through the
more rigorous tax clearance process required for larger transactions under the foreign investment
allowance. It provides South Africans with flexibility and freedom to manage legitimate offshore
financial activities within a clearly defined framework.
It’s important to note that the SDA is not cumulative — if you don’t use it within the year, it simply
resets on 1 January. Individuals also cannot “borrow” their future allowance or transfer unused
portions to others. At Rand Rescue, we help clients understand their SDA and use it effectively,
especially when moving funds abroad during emigration or offshore investment planning.
Who Qualifies For The Single Discretionary Allowance With SARS?
The SDA is available to each South African resident (aged 18 and over) in possession of a bar coded South African identity document and SARS tax number.
Importantly, minors do not qualify for the SDA. Instead, children under 18 receive a R200,000 annual
travel allowance, which can only be used for legitimate travel purposes. For example, overseas
holidays, school trips, or family travel. Authorised Dealers require proof of travel, such as airline
tickets and accommodation arrangements before releasing funds under a minor’s allowance. The
minor travel allowance cannot be used for gifts, investments, offshore savings, or general transfers.
If you are uncertain whether you meet the tax residency criteria, Rand Rescue can help you
determine your status, explain your options, and facilitate both SDA and other transfers. Many South Africans inadvertently assume they are non-resident after moving abroad, but unless you have received a notice of non tax residency from SARS or completed the Financial Emigration process (prior to 01 March 2021), and you meet the requirements, the SDA is still available to you.
What Can Be Transferred Using The Single Discretionary Allowance?
The single discretionary allowance may be used for any legal purpose abroad (including for
investment). It may be utilised solely at the discretion of the resident, without a requirement for the
resident to produce documentary evidence relating to the funds to be transferred to the Authorised
Dealer. Common uses for the SDA include:
- Foreign travel expenses, such as accommodation, spending money, or overseas purchases.
- Payment of subscriptions, memberships, or fees for foreign services.
- General allowances, including offshore credit card spending or PayPal funding.
- Certain offshore investments, such as opening a foreign bank account or investing in
approved global platforms (depending on bank requirements).
The SDA cannot, however, be used for every type of transfer. It does not cover large-scale
investments requiring SARS TCS clearance, nor can it be used to transfer certain retirement funds, or restricted assets. Inheritance funds under R1m can be transferred using your SDA. assuming you
have the required SARS tax number and South African bar-coded identity document.
If your transfer involves retirement annuities, or complex financial structures, you will likely need a
different process. Rand Rescue specialises in guiding clients through this.
For everyday transfers under R1 million, the SDA is a convenient and efficient option — Rand Rescue
can manage the entire process to ensure compliance with both SARS and SARB regulations.
What Documents Do I Need To Make Use Of My Single Discretionary Allowance?
Unlike the foreign investment allowance, the SDA does not require a SARS TCS pin. However, you
will still need to meet your bank or authorised dealer’s compliance requirements before transferring
funds offshore. Typically, the following documents are required:
- Bar coded South African identity book/smart card
- SARS tax number
- Proof of the source of funds
- For minors using their R200,000 travel allowance: proof of travel, such as flight tickets
Authorised Dealers must adhere to strict exchange control reporting, so they may request additional
information based on the purpose of your transfer. For example, if funds are being sent as a gift,
some banks may ask for a recipient full name and residential address.
If you’re unsure which documents you need, Rand Rescue provides full assistance throughout the
process. We help ensure all paperwork is compliant and submitted correctly, significantly reducing
the likelihood of delays or requests for additional documentation.
When Does My Annual Single Discretionary Allowance Reset?
The SDA follows the calendar year, which means your R1 million allowance resets on 01 January
each year. The full allowance becomes available again at the start of the new year, regardless of
whether you used only part of it or none at all in the previous year. The unused portion does not roll
over, so if you do not use your allocation before 31 December, it simply expires.
Because the SDA resets annually, many clients choose to transfer Rands out of South Africa
strategically — for example, splitting a larger transfer across two calendar years to maximise both
the SDA and the foreign investment allowance without exceeding limits.
It’s also worth noting that Authorised Dealers can take a few days to process transfers, especially
toward the end of December when workloads increase, multiple public holidays and early closure. If
you are planning to use your SDA before year-end, it is wise to start the process early. Rand Rescue
can coordinate the entire transfer to ensure everything is completed within the correct timeframe.
Do I Need Any Clearance From SARS In Order To Use My Single Discretionary Allowance?
One of the key advantages of the SDA is that you do not need tax clearance from SARS to use it. No
TCS pin, no tax clearance certificate, and no pre-approval is required.
However, while SARS clearance is not required, your bank or authorised dealer will still conduct their
normal due diligence checks. These may include reviewing your tax status, verifying your personal
information, confirming the purpose of the transfer, and ensuring you are compliant with exchange
control regulations.
Do I Still Have A Single Discretionary Allowance If I Am Non-Tax Resident With SARS?
Once SARS has formally classified you as a non-tax resident and you receive your notice of non
resident tax status, you no longer qualify for the R1 million SDA (other than a travel allowance in the
same you ceased tax residency). Instead, you fall under a different set of exchange controls. The SDA is specifically reserved for individuals who are still recognised as tax residents of South Africa by SARS.
However, being a non-resident does not prevent you from transferring money out of South Africa.
You can still move funds such as retirement proceeds, inheritance payouts, income, or
disinvestments — but the process and requirements change. In most cases, you will need a TCS pin
with your “Approval: International Transfer” (AIT) with some exclusions and differing processes.
Many South Africans living abroad mistakenly believe they are non-tax resident simply because they
have relocated abroad. The only way to change your SARS tax status is through a formal application
to SARS – simply moving does not change your tax status.
Rand Rescue can assist you with tax emigration, surrendering retirement funds and other
investments, receiving an inheritance from South Africa, non-resident status changes, and
international money transfers, ensuring that your tax residency status aligns with your actual
financial objectives and offshore needs.
Can My Spouse Use Their Single Discretionary Allowance When I Have Maximised Mine?
Yes — if your spouse meets all exchange control requirements, they have their own SDA. These
allowances are not shared or pooled, and each individual over age 18 receives a full personal
allocation for the calendar year.
This is particularly useful for couples planning to transfer larger amounts offshore. For example, if
you have already used your full SDA, your spouse may still transfer R1 million using theirs. In South
Africa, donations between spouses are fully exempt from donations tax. Spousal allowances can also be combined with each individual’s foreign investment allowance, allowing for substantial offshore transfers when managed strategically.
Authorised Dealers may still ask for documentation proving the relationship between spouses, such
as a marriage certificate, especially when the source of funds originates from a joint account or from the spouse who has already used their own SDA. Rand Rescue frequently assists couples in
coordinating these transfers to ensure all paperwork is compliant and the process is seamless and
stress-free.
Proper planning can significantly reduce delays — and Rand Rescue can help you and your spouse
navigate both SDA and FIA strategies effectively.
The single discretionary allowance is one of the simplest and most flexible ways for South African
tax residents to transfer money offshore. Whether you’re travelling, supporting family abroad,
investing, or preparing for emigration, understanding how SARS regulates the SDA can save you
time, stress, and unnecessary administrative hurdles.
If you need help transferring money out of South Africa, navigating SARS requirements, or planning
a compliant transfer strategy, Rand Rescue can assist you every step of the way. Reach out today for a free, no-obligation quote and let our experienced team guide you through your single
discretionary allowance and beyond.
