Over the past decade, ever since Treasury allowed a far greater offshore investment allowance from1st April 2015, an estimated R1,5 trillion has legally left the country to be invested in offshore equities, properties or simply in hard currency bank accounts.
In the 2015 budget it was announced that SA investors can remit R1m annually as a single discretionary allowance with another R10m per year per investor, should certain tax requirements be met.
This meant that a compliant family could move as much as R22m per year (and in some cases more) per annum to the investment destination of their choice.
This radical change in Treasury regulations—totally unexpected at the time—has had a profound effect on financial markets in South Africa since then—with most local asset management companies totally unprepared for the massive outflow of capital from local to offshore markets.
Most large asset managers have experienced a decade of massive withdrawals out of local discretionary funds into the hands of global investment giants such as Franklin Templeton, Vanguard, Black Rock and Orbis.
Very few were prepared for this torrent of capital leaving our shores and it was only Allan Gray (Orbis) and Ninety-One (Investec Asset Management at the time) who could offer offshore products to their SA client base.
The rest of the industry – with the help of certain myopic media commentators – gamely tried to make a case for “local is lekker” and branding offshore investments as “unpatriotic and disloyal”.
Massive increase in global wealth
I was a strong proponent for offshore investments and at Brenthurst we persuaded a very large percentage of our clients to make use of this increased allowance, which many fortunately did.
The difference in investment returns over 10 and even 15 years is truly amazing.
At the time the JSE’s performance was under pressure from the effects of State Capture and the damage being inflicted by former president Jacob Zuma.
The rand too was under pressure as foreign investors withdrew large amounts of capital from SA bond and equity markets.
At the same time US markets were already showing signs of “American Exceptionalism”, driven by the performance of the Magnificent Seven – companies such as Amazon, Apple, Netflix, Google and many others.
Early investors who took out R10m in 2015 and having invested in fast-growing sectors could easily be sitting with amounts in excess of R100m and more.
Returns of the US Nasdaq and S&P500 have been double and even treble the returns on the local market over the same time.
Others used the allowance when the rand was trading around R12 to the USD to acquire global property, either in Spain, Portugal or Mauritius, and they too have seen very nice increases in value over time.
Global wealth not well protected
Now here’s the problem. Such was the rush to get the money offshore, lest the allowances be withdrawn as many left-leaning politicians threatened during election times, that very little thought was applied to the nature of the offshore structures holding this wealth.
Ideally, any large amount of money should first have been placed in a trust and then invested. Almost all the offshore investment platforms—MWI, Glacier, Old Mutual and Alan Gray—offered the same structures for SA investors placing their assets offshore.
These investments were mainly in (a) individual investments accounts, (b) endowments, (c) sinking funds and or share portfolios as far as listed investments were concerned.
None of them offered trusts as an option.
Properties too, were mostly registered in personal names or joint names if allowed in specific countries.
Great as these investments were, they were still in the estate of the original investor and would firmly land in the punitive tax net awaiting death or even divorce.
Still time to fix the problem
Today, ten years later and with the value of those offshore values increasing beyond belief in many cases, this has created a problem that needs urgent attention: all those offshore assets are still in personal names and will be dealt with in terms of SA tax laws, which includes punitive taxes such as estate duties and other taxes that come into play when assets are redistributed to spouses, children and even grandchildren.
It is not uncommon for estates to change ownership two to three times in a short space of time, every time having capital gains taxes, estate duties and executor’s fees reduce the original, large estate, to a very small one over time.
I have personally dealt with cases where the original investor dies, soon thereafter the spouse and not long thereafter one of the children.
At each death CGT, estate duty and executor’s fees rapidly diminish the remaining wealth.
Don’t let that happen to your estate.
In addition, due to enormous delays at the various Master’s Offices countrywide due to incompetence or just total indifference, estates could take anything up to 2-3 years to wind up, often causing major problems to heirs awaiting their inheritances.
All this can be, upfront, solved by the creation of a trust in one of the many reputable jurisdictions such as Guernsey, Gibraltar, or Mauritius.
Mauritius has in recent years made enormous strides in the offering of global financial services and the industry is very strictly controlled by the Financial Services Commission (FSC) on the island.
Brent Consulta
Several years ago, it became clear that Brenthurst needs to set up or acquire its own trust company in Mauritius, where we already had an asset management license (Brent Wealth) which offered global advisory services to our non-SA and ex-SA clients.
After several years of negotiating we managed to purchase an existing trust company, renaming it Brent Consulta.
Brent Consulta now has a staff compliment of 14 people, operating out of offices in Grand Baie and Black River in Mauritius and Stellenbosch in South Africa.
Strong recommendation
I am now a very strong advocate of setting up an offshore trust in Mauritius as soon as capital is exported from SA in order to invest in either global listed assets or property, either in Mauritius or anywhere else in the world.
The longer the delay the greater the cost to rectify the initial mistake.
The set-up costs—ranging from $2 500 to $4 000 is often a very small price to pay when measured against the tax savings over the lifetime of the investment, which often is measured in decades rather than years.
This is particularly imperative for SA investors taking out fresh money, there is no capital gains tax to consider when money is converted from a personal name to the name of the trust.
However, SA tax laws require that such a transfer of money be deemed a loan, and that a certain interest rate must annually be paid to service the loan.
This is where specialized tax planning can reduce the cost of the loan (and the interest charged) substantially.
So, my advice when you start taking money offshore, especially if you think you will be moving large amounts every year, is to set up the trust first and then do all the investments via the trust thereafter.
This ensures inter-generational wealth protection, out of the hands of certain greedy politicians who are often threatening a raid on the so-called “wealthy”.
Estate duty for estates larger than R30m is already 25% and is bound to move higher over time as the Treasury gets more desperate for money.
Setting up of a trust requires specialized tax and estate duty knowledge and experience as each trust is different.
Brenthurst has a team of estate planning and tax experts to assist investors in setting up the appropriate trust which caters to their specific requirements.
Over the past ten years I have advocated an investment strategy for putting as large a distance between your investments and the rapacious policies of the ANC as far as possible: offshore as far as global equities is concerned and the Western Cape if you wanted to invest in residential and commercial property. This simple strategy has been very successful indeed.
A Mauritian Trust is the best way possible to protect your family’s wealth from the ANC.
Speak to any one of Brenthurst Wealth’s office in South Africa to discuss setting up a trust or write to invest@brenthurstwealth.co.za for set up a Teams appointment with one of trust specialists in Mauritius via info@brentconsulta.mu.
Your children and grandchildren will one day thank you for that.
Magnus Heystek is director at Brenthurst Wealth.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
Angelique Anderson joins our Pretoria office as an Administrative Assistant, bringing over 24 years of experience across the financial, legal, and executive support sectors, both locally and internationally. Her meticulous attention to detail, discretion, and extensive knowledge of asset finance and compliance make her an invaluable addition to our team.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
Michelle joined the Brenthurst Wealth Team in 2025 as a paraplanner assisting Iniel Van Zyl and Leslie Greyling in our Fourways office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
