New exco rules lessen the burden

Limit of R100 000 for maintenance and alterations to fixed property abolished.

In line with Treasurys stated objective to undertake further administrative reforms on exchange controls, below is a brief summary of the latest changes announced July 1 (effective 9/7/2010):
Emigrants:

1. Export of quoted securities subject to 10% levy – In the past, emigrants have been able to exit funds from SA subject to the 10% exit levy. This dispensation was restricted to cash transfers and was not applicable to assets held such as shares. The 10% dispensation has now been extended to listed shares.

This means that an emigrant may effect the 10% levy payment on shares held, and retain such shares as a non-resident. This is a very important change as it allows the externalization of the shares without the need to liquidate.

2. Limit of R75 000 increased to R750 000 – This limit relates to the release of blocked funds locally when emigrants visit SA on an annual basis. Previously, the limit of R75,000 was reduced further depending on the length of stay, but this aspect has been taken out, i.e. an annual limit of R750 000 is now applicable to emigrant families visiting SA regardless of the length of stay.

3. Gift allowance of R100 000 increased to R750 000 – The annual gift allowance in respect of gifts to residents (again sourced from blocked assets) has been increased from R100 000 to R750 000.

4. Limit of R100 000 for maintenance and alterations to fixed property abolished – We may now release funds from an emigrants blocked account for maintenance and alterations to fixed property forming part of the emigrants blocked assets without restriction, provided that sufficient documentary evidence is provided confirming the nature of the payment and parties concerned.
Miscellaneous:

Further general changes have been made as follows:

1. A limit of R50 000 per transaction has been introduced for miscellaneous payments to non-residents not specifically dealt with in the exchange control rulings.

2. Certain fees may be paid in respect of inward loans provided that such payments are made from the loan funds introduced into SA.

3. The limit for omnibus travel facilities for companies has been increased from R2m to R10m.

4. Further dispensations have been granted in respect of royalties and service payments.

TAXtalk: www.taxtalk.co.za