Investing directly offshore has gained popularity in the past decade, as investors started looking for the superior returns offered by international markets against the backdrop of a struggling local economy. Many tried to invest directly offshore and had a bad experience doing so thanks to either fees, taxes or estate problems lingering in the back of their minds.
Globalisation has changed many things in our world, including the way we invest. Offshore investing has also become much more accessible than in the past. Nowadays an offshore account can be opened in one or two days which allows for investing in anything money can buy. BUT this may come at a much bigger price than what one might have bargained for.
When investing directly offshore it is important to not only know South Africa’s regulations regarding taxes and estate duty, but also the regulations and taxes of the country you are holding your share/portfolio/investment in.
Red flags to note when investing offshore:
1. Situs tax
- In the UK this is known as inheritance tax, in the US it is called estate tax. Collectively, it is known as “situs tax.”
- If you own assets upon death in the UK of an amount over £325 000, 40% situs tax will be levied on situs assets over the value £325 000.
- In the US situs is triggered at a dangerously low threshold of only $60 000.
- These are payable even before SA estate duty comes into play.
2. Grant of Probate
- This can simply be described as a type of offshore executor of your offshore assets that you would need to appoint to specifically manage all your assets outside of SA. Effectively accruing more fees upon death.
An experienced, qualified financial advisor can guide investors through this process. They continuously research ways to invest individuals’ money the best way possible, taking into consideration the present and future risks and regulatory hurdles an investor would face.
One structure that is not only affordable, tax-friendly, easily inheritable and liquid, and widely regarded as the holy grail for investment structures offshore is an international endowment option. It offers significant benefits regarding all the challenges mentioned:
- Investments and withdrawals can be made in USD/EUR/GBP/ZAR.
- There is no VAT (currently at 15% in SA) on investment management or administration fees as the structure is set up in Guernsey.
- At Brenthurst Wealth we invest in global roll-up funds, which means all dividends and interest earned gets rolled up into the unit price rather than paid out, thus a yearly tax on dividends and interest reduces to 0%.
- Capital gains tax is only applicable to withdrawal for a top tax bracket individual, which effectively reduces from 18% to 12%.
- ZERO capital gains tax payable on death when inherited by spouse or children as the assets are not sold. This enables the investment to build more cumulative returns over time, effectively creating more wealth.
- Capital gains are calculated in USD terms and do not include gains from the weakening of the ZAR.
Drawbacks of this structure:
- Within the first five years, the investor can make only one loan and/or one withdrawal against the investment. This can be a partial or full loan/withdrawal against the invested amount. (After five years it becomes an open structure and additions, and withdrawals are unlimited).
- A withdrawal may take up to 15-20 working days.
- This investment can only be made in the personal name of the investor, or offshore company and offshore trust.
- For investments made with SA companies and SA trust capital, there are different beneficial structures to help invest with offshore exposure and benefits.
- The minimum investment amount is $18 000.
Utilising the correct structure to invest offshore will not only pave the road to wealth generation for you and generations after you, but it will save your loved ones a lot of headaches and costs when you pass away and hand over the legacy built.
As with all investment options, it can best be navigated with the guidance of a professional, qualified, financial advisor.
“Someone is sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett
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.
