A guide to using your Single Discretionary Allowance

The recent increase in the annual limit provides even greater flexibility for individuals and families looking to diversify part of their wealth beyond the rand. Increasingly, South African residents are incorporating the SDA into their long-term wealth planning. Rather than a once-off opportunity, this has become a smart move by families looking to build long-term financial resilience. 

1. What is the SDA and who can use it? 

The Single Discretionary Allowance allows South African residents aged 18 or older to transfer up to R2 million offshore per calendar year, without requiring a tax clearance certificate from SARS. 

The allowance is part of South Africa’s exchange control framework and can be used for a range of legitimate purposes, including: 

• Holding funds in foreign currency 
• Investing in global markets 
• Supporting international lifestyle needs such as travel, education or property 

The SDA applies to individuals and resets at the start of each calendar year. 

2. Why more South Africans are moving funds offshore 

Moving money offshore is not a vote against the country’s future, but simply a way to reduce your financial risk. At its core, this is a simple way of diversifying your finances. 

This type of diversification helps lower your concentration risk by spreading the risk of currency fluctuations across multiple currencies rather than only your local currency. The increased annual SDA threshold means that families and long-term investors now have even greater flexibility in growing their offshore exposure. 

3. Why offshore accounts support global resilience 

An offshore bank account provides the infrastructure required to manage wealth internationally. These accounts act as your gateway to opportunities and services that are simply not available locally. 

A Standard Bank offshore account lets you: 

• Hold funds in major currencies such as GBP, USD, EUR and AUD 

• Transfer between currencies as needed 

• Easily make international payments 

• Lower foreign exchange friction when travelling or working abroad 

• Take advantage of global savings and investment solutions 

Standard Bank Offshore accounts are domiciled in well-regulated international jurisdictions in Isle of Man and Jersey, and are designed to support South African clients managing global interests. 

4. How to get started 

Using your SDA is straightforward. 

If you already have an offshore account with Standard Bank, you can transfer funds directly from your South African account using the Banking App. No paperwork is required, and no tax clearance is needed for transfers within your annual allowance. 

If you don’t yet have an offshore account, you can apply online to open yours. 

You don’t need to transfer the full R2 million at once, with many clients choosing to move funds gradually over the course of the year. 

5. What happens next 

Transferring funds to your offshore account is just the first step. 

With your funds securely stored offshore, you can choose to: 

• Hold them in one or more foreign currency as part of a diversification strategy 

• Allocate them to offshore savings solutions 

• Explore global investment opportunities aligned to your long-term goals 

Take the next step 

If you already have an offshore account, you can transfer funds using your available SDA in the Banking App. It’s as simple as following the International Payment process in the app.  

If you would like guidance, your banker or offshore specialist can help you structure your approach and plan your annual offshore strategy. 

Remember that the SDA resets each calendar year, so it can be used as part of an annual offshore funding strategy. 

You can learn more about our offshore bank accounts by clicking here.