Question:
My daughter is coming back from the UK on 31 March 2010 after 20 months away. She would like to bring 4000 pounds back.

How much money can you bring back without declaring it? Should she transfer the money from there to her account here or in what form should she bring it?

Answer:
A person can bring as much foreign currency into South Africa as they like. There are only restrictions on how much rand can be relocated to another country.

Every pound that needs converting to rand will have to be taken to the foreign exchange department of a bank (or some such exchange bureaux); where else will you get your cash converted?! At this exchange bureaux there will be some forms to complete. These are merely forms that need to go to the South African Reserve Bank (SARB) for them to keep record of the amount of foreign currency in South Africa at any given time. This information helps to determine the foreign currency exchange rates.

Carrying cash is always risky, which is why traveller?s cheques are an option. There are costs involved in buying them and in redeeming them, so first enquire about that.

If a person transfers funds from a bank in the UK to a South African bank account there will also be forms filled in at the time of transfer that show the flow of funds from one country to another, purely for the respective country?s foreign exchange records. There are also charges for transferring funds, over and above the exchange rates, so find out how much they are too. It is usually cheaper to transfer the whole sum at once as transaction fees can be quite high.

From an income tax point of view, money earned in the UK by a non-resident of SA will be taxed in the UK and therefore not be taxable in South Africa. Obviously any interest earned after it is invested in South Africa will be taxable, but subject to interest rate exemptions (If the amount of about R50 000 is the only cash investment then no interest will be taxable).

The final checkpoint on cash flows is the money laundering legislation in SA which has set in place various rules and regulations to deter criminal activity. Large amounts of cash (I believe a large amount is defined as R50 000 upwards, so 4000 pounds may qualify) taken to a bank will require some form of proof of origin. Criminals are not usually in the habit of banking, declaring and paying tax on proceeds of crime so they deal mostly in cash. This is why large amounts of cash need an explanation. It would be useful if one could prove that an income was earned in the UK (by way of a pay slip or such item) if you choose the cash route.

I wish your daughter well on her return to sunny South Africa!

acsis Limited is an authorised financial services provider. The response to the question covers some of the issues in a general and factual manner and does not constitute advice. It is important to consult with a financial planner who, after an analysis of the individuals? personal needs, goals and circumstances, will be able to provide comprehensive and appropriate advice.