For South Africans considering buying property in Mauritius, the process of externalizing funds from South Africa and ensuring SARS tax compliance can seem daunting. This article aims to simplify the steps involved, providing a clear guide for individuals looking to move their money out of South Africa to invest in real estate in Mauritius. We thank Peter Droussiotis (Photo), Foreign Exchange Consultant at Legacy Family Wealth (Pty) Ltd based in Bryanston, for his valuable input on this matter.

The article explores how South Africans can get their funds remitted out of South Africa against their R1M annual single discretionary allowance per calendar year as well as against a SARS AIT Pin clearance for between R1M – R10M. Should clients need to remit more than the R10M in a calendar year, they would need to apply for South African Reserve Bank Special Clearance.

Fund externalization process

1. Setting up your account

To kickstart the externalization process, you need to open an account, a task that can be completed within hours. The necessary documents include a copy of your South African ID and a utility bill or bank statement, serving as proof of address (not older than three months). Once your account is set up, you can remit up to R1 million for the calendar year through this account.

2. Applying for the SARS AIT Pin

If your investment exceeds R1 million, you'll need to apply for a SARS Approval for International Transfer (AIT) Pin. Depending on the source of your funds—be it savings, trust distribution, inheritance, property sale, or shares and securities—the required documents vary. Here's a brief breakdown:

Savings/Cash:

  - Bank statement reflecting savings/cash value.

  - Review of the past three years' taxable income for income/salary claims.

Trust Distribution:

  - Copy of Trust deed.

  - Resolution and details regarding the source of funds.

  - Bank statement reflecting the distribution from the trust.

  - Trust financials and the latest share portfolio statement.

Inheritance:

  - Copy of Final Liquidation & Distribution account.

  - Bank statement reflecting the received inheritance.

Sale of Property:

  - Original letter of the Conveyancer or proof of receipt of proceeds.

  - Split of proceeds for jointly owned property.

  - Capital Gains Tax calculation on the sale of property.

Sale of Shares and Other Securities:

  - Capital Gains Tax calculation on disposal of shares.

  - Portfolio statement reflecting the sale of shares.

Recent Changes in Tax Compliance Status (TCS) Process

Effective April 24, 2023, SARS has introduced procedural changes to the Tax Compliance Status (TCS) Process. These changes, while not altering the rules, aim to simplify the process. For South Africans eyeing Mauritius property, these changes mean ensuring "Tax Compliance" before transferring funds abroad.

Key Changes Tailored for Property Investment in Mauritius:

1. Unified TCS Pins:

   Formerly, SARS issued separate TCS pins for emigration and Foreign Investment Allowance (FIA). Now, these have merged into a single "Approval for International Transfer" (AIT) pin.

2. Updated Information Requirements for AIT Application:

   SARS has streamlined the AIT application process, requiring:

   - A statement of assets and liabilities for the previous three years.

   - Indication of South African tax residency status.

   - Declaration of being a beneficiary of a local or foreign trust.

   - Disclosure of any interest (direct or indirect) of 20% or more in local or foreign entities.

   - Identification of any loans held in local or foreign trusts.

For detailed guidance, you can refer to the SARS website.

In conclusion, making the dream of owning property in Mauritius a reality involves understanding the straightforward steps to externalize funds and comply with SARS regulations. By following this guide, South Africans can smoothly transfer their money to invest in the enchanting real estate opportunities that Mauritius offers.

Share