For those living abroad, receiving an inheritance from South Africa can be a bittersweet process.

The idea of receiving an inheritance is, in theory, straightforward — until you are faced with the practical reality of paperwork, regulatory approvals, and delays before the funds are finally released.

Transferring an inheritance from a South African estate to an overseas beneficiary requires compliance with both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB). Understanding these requirements up front helps avoid unnecessary delays or penalties.

Step 1: The estate must be wound up

Before any money can leave South Africa, the deceased estate must first be finalised. This involves reporting the estate to the Master of the High Court, appointing an executor, collecting the assets, settling debts (including any estate duty owed — 20% on the dutiable estate up to R30 million, and 25% above that, after the R3.5 million abatement), and determining the amount available for distribution to heirs. This process commonly takes anywhere from six months to two years or more, depending on the complexity of the estate, so it is worth setting expectations accordingly.

Step 2: Confirm your tax residency status

A key step is establishing whether you are a South African tax resident or a non-resident for tax purposes. This is determined by SARS, not by whether you hold a South African ID document. You are a tax resident if you are “ordinarily resident” in South Africa (broadly, the country you would naturally return to), or, failing that, if you meet the physical presence test (91 days or more in South Africa in the current tax year and each of the preceding five years, and more than 915 days in aggregate over those preceding five years). A tax resident who has been physically outside South Africa for a continuous period of 330 full days may cease tax residency.

It is worth noting that “financial emigration” as a separate exchange control category was discontinued by the SARB in March 2021. There is no longer a standalone SARB emigration process running alongside the tax process. Today, exchange control status follows your SARS-determined tax residency: once you have formally ceased South African tax residency with SARS, your exchange control treatment is aligned to that status automatically, rather than through a separate application.

Step 3: Gather the required documentation

Regardless of your residency status, you will typically need to provide:

• A certified copy of the death certificate
• A certified copy of the last will and testament
• The Letters of Executorship
• The Final Liquidation and Distribution Account, approved by the Master
• Proof of the inheritance, such as a letter from the executor confirming the bequest

If you have ceased your South African tax residency, you will also need:

• Your SARS Non-Resident Confirmation Letter, verifying that you have exited the South African tax system and are no longer liable for South African tax on your worldwide income
• A Tax Compliance Status (TCS) PIN from SARS, generated via eFiling under the Foreign Investment Allowance (FIA) category. This 10-digit code allows a third party — such as your bank — to verify your tax compliance status in real time
• Your non-resident bank account details  
  

Step 4: Submit to an Authorised Dealer

The documentation above must be submitted to an Authorised Dealer, such as a local bank or financial services provider, who may request additional documentation to verify the legitimacy of the inheritance and the source of funds before releasing the transfer.

Other considerations

There is no capital gains tax payable by a beneficiary simply on receiving an inheritance — any CGT on the deceased’s assets is settled by the estate before distribution. However, the market value of the asset on the date of death becomes your base cost, which matters if you later sell an inherited property or shares. Beneficiaries living in a country with a double taxation agreement with South Africa should also check whether that agreement affects how the inheritance, or any future disposal, is taxed in their country of residence.

While the process of receiving an inheritance from South Africa as a foreign-based beneficiary can seem daunting, it is manageable with the right preparation: finalising the estate, correctly confirming your tax residency status with SARS, and gathering the required documentation. Given the number of regulatory bodies involved, it is generally advisable to seek guidance from a suitably qualified professional.

Sources

1. FinGlobal – How to get inheritance money out of South Africa
2.  FinGlobal – Document checklist for South African inheritance overseas
3.  FinGlobal – SARS Tax Compliance Status PIN: what is it and how do I get it?
4.  SARS – Cease to be an SA tax resident and reinstatement of SA tax resident
5.  SARS – Estate Duty
6.  SARS – Tax and Non-Residents

Erin Powell | Candidate Legal Practitioner