Sending money out of South Africa

Where the cost hides

As with inbound transfers, the visible fee is rarely the main cost — the exchange-rate margin is, and on a large transfer it dwarfs everything else. On R500 000, the difference between a 0.5% and a 2% margin is R7 500, considerably more than any fee you will be quoted.

The comparison that matters is the total foreign currency delivered for a fixed rand amount. Ask two or three providers to quote the same transfer on the same day and compare only that.

Banks, brokers, and what each is for

• Your bank. Convenient, already holds your documents. Usually the widest margin, and the treasury desk may not negotiate on smaller amounts.
• Money-transfer specialists. Better margins, online-first, well suited to recurring or mid-sized transfers.
• Forex brokers with a dealing desk. Worth it on larger amounts, where a named dealer, a negotiated rate and tools like forward contracts start to matter. Many also handle the SARS AIT application as part of the service.

Providers moving money across the border must be registered with the Reserve Bank — as an Authorised Dealer, or an Authorised Dealer in foreign exchange with limited authority. That is a reasonable thing to check before handing over a large sum.

Expect to explain the purpose

Every cross-border transfer is reported to the Reserve Bank under a balance-of-payments category describing what the payment is for — a gift, a travel allowance, an investment, a property purchase. Answer accurately: the category determines which allowance the transfer draws against.

Timing and the calendar year

Allowances run on the calendar year, not the tax year, and unused allowance does not carry over. If you are moving a large amount around year end, splitting it across 31 December and 1 January draws on two years' allowances. Rates move independently of your paperwork, so it is worth having clearance in place before you need to transact.

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