We are a couple in our 70s, retired, with a living annuity with Coronation. Our two children are beneficiaries: one lives in South Africa, and the other has emigrated to Australia and is an Australian citizen. How can our Australian child access their portion of the living annuity upon our deaths? What options are available, and what should we do to ensure their inheritance is accessible?
Dear reader,
Many South African families have loved ones living abroad, and ensuring their financial well-being after the parents’ passing is a significant concern. This is particularly relevant when considering assets like living annuities.
South Africa has specific regulations governing the transfer of funds out of the country. These regulations, combined with the complexities of estate administration and cross-border inheritance, can make accessing a South African living annuity for a global beneficiary challenging.
Read: Is it advisable to invest in annuities in SA while I permanently live in the US?
You mention that your child has emigrated. However, I would like to address this question by posing all options available to beneficiaries living locally and abroad. I am answering as if you are unsure about this fact to state all options to the beneficiaries.
Key considerations
One has to consider whether the beneficiary living abroad is still considered a SA resident or if they have emigrated. This will determine how much money they can repatriate out of the country with or without obtaining the approval required from the South African Revenue Service (Sars).
Read: Navigating tax on living annuities when emigrating
If they have not emigrated and still have an income tax number and barcoded ID, they will be allowed to repatriate R1 million per calendar year without having to obtain Sars approval. If they have emigrated, they are allowed to take out more than the R1 million without approval, as they will do it under a different source code as a non-resident.
Beneficiary options
Living annuity (LA) beneficiaries have three options:
- They can start their own (new) LA, and the benefit will be transferred into their new investment. It is a tax-free transfer, but the future income payments will be taxable in their own hands according to the pay-as-you-earn (PAYE) schedule. It will be added to your other taxable income. If the beneficiary has not emigrated, they can choose to receive the income in their SA bank account, and then the funds can later be transferred to their offshore bank account. The income can be paid monthly, quarterly, bi-annually or annually. It will probably be a better (less expensive) option to do these income payments and transfers once per annum. In most cases, this option is not ideal for offshore beneficiaries, as it will create an estate for them within SA.
- They can repurchase their portion of the benefit bequeathed to them, but this is fully taxable in the hands of the estate. They will receive the after-tax money in their bank account. However, this could lead to quite a big tax bill to foot, depending on the amount being withdrawn.
- A combination of the above two points is available.
So, to answer your question – option two will likely be applicable to their scenario.
Retirement funds that are bequeathed to beneficiaries who reside outside the borders of South Africa generally create a taxable event for the estate, and the beneficiary ends up with less money than what was anticipated by their loved one. It is better to bequeath retirement funds to an SA resident beneficiary/ies and discretionary funds to the beneficiary/ies who live abroad. These funds are subject to capital gains tax, which is already payable by the estate at a (possible) lower tax rate.
Read:
Estate planning: Death and your retirement investments
Life and living annuities in the context of your estate plan
Maximising your legacy: Assets that don’t attract estate duty
In any of the above scenarios, it remains my advice to always speak to a qualified financial advisor and estate planner to assist in making the correct decisions.
Disclaimer: While this article provides general information. It’s essential to consult with a financial advisor and legal professional for personalised advice tailored to your specific circumstances.
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
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.
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.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch 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.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
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.
