What is a Foreign Exchange Allowance?

Every calendar year, each South African resident is granted a R1 million SDA (Single Discretionary Allowance) and R10 million FIA (Foreign Investment Allowance) to send funds offshore. These two allowances combined form your Foreign Exchange Allowance which, in total, enables you to send up to R11 million abroad in a calendar year. These allowances are reset on 1 January each year, irrespective of how much was utilised in the previous year.

When investing in Crypto Asset Arbitrage, a portion of your Foreign Exchange Allowance is used each time your funds are sent abroad to purchase crypto assets overseas. This caps the total value that each individual can invest in Crypto Asset Arbitrage each year, effectively limiting the profit that can be made annually (~R250,000 profit). While this is not ideal, the Foreign Exchange Allowance is the very reason this arbitrage opportunity exists in the first place (see “Why does this arbitrage opportunity exist and how long will it last?” FAQ).

Your R1 million SDA can be readily used without any additional paperwork. In addition to utilising your SDA, our tax practitioners are able to (at no extra cost) assist with unlocking your R10 million FIA. This requires an application to SARS which your Relationship Manager and our tax practitioners will facilitate so that your entire experience is hassle-free.