By Brian Butchart – Managing Director
The new global standard on Automatic Exchange of Information will enable governments to recover tax revenue lost to non-compliant taxpayers, and will further strengthen international efforts to increase transparency, cooperation, and accountability among financial institutions and tax administrations.
South Africa’s exchange controls have only as recently as 1997 allowed South African’s to invest abroad. Officially anyway! Of course there are countless stories of how many a South African for many reasons took funds offshore in a variety of interesting ways prior to 1997.
Since then, however, local exchange controls have become a lot more relaxed allowing for up to R10 million per annum per individual to be transferred offshore with tax clearance and R1 million per annum, without tax clearance for travel, studies, gifts and loans.
In the wake of sensational news like the so-called Panama Papers and a leak of documents of international bank HSBC, which exposed global tax dodgers, governments around the world have agreed to take strong action to reduce international tax evasion through offshore assets.
The new global standard on Automatic Exchange of Information (AEOI) will enable governments to recover tax revenue lost to non-compliant taxpayers, and will further strengthen international efforts to increase transparency, cooperation, and accountability among financial institutions and tax administrations.
Additionally, AEOI will generate secondary benefits by increasing voluntary disclosures of concealed assets and by encouraging taxpayers to report all relevant information.
The South African government, like the G20 countries and several others, have agreed to this new global standard. The standard requires financial institutions to report information on accounts held by non-resident individuals and entities (including trusts and foundations) to their tax administration. The tax administration then securely transmits the information to the account holders’ countries of residence on an annual basis.
It is against this background that it was announced in the 2016 South African national budget that an amnesty period will be available to local taxpayers with offshore assets to regulate their affairs before the AEOI comes into effect in 2017.
The SA Revenue Service (SARS) has issued a draft guide on the special voluntary disclosure programme, which from 1 October 2016 will offer non-compliant taxpayers an opportunity to disclose any undeclared offshore assets and income, until 30 June 2017. The initial closing date was set for March 2017, but this was extended to allow more time as in some cases the process may be drawn out. Another change posted to the SARS website states that the tax penalty has now been reduced from 50% to 40% of the highest capital value over the last five years added to an individual’s taxable income.
The guide says the special voluntary disclosure programme is intended to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with SARS and avoid the imposition of understatement and administrative penalties. Relief is available in respect of all taxes administrated by SARS, but excludes duties charged in terms of Customs and Excise regulations.
SARS has confirmed that any person may apply for voluntary disclosure relief. However, a person that is aware of a pending audit or investigation, or is the subject on a not yet concluded audit or investigation, may not use the scheme.
Individuals and companies may apply. Trusts, may not. However, beneficiaries of trust may apply provided they deem the assets and income of the trust as their own. Taxpayers with pending audits or investigations regarding their offshore assets and taxes will not qualify for relief.
A similar process offered in 2003/2004 netted an estimated R65bn in disclosures and it is currently estimated that at further R200bn in offshore capital is still outside the tax net.
Should you wish to take advantage of the amnesty period and regulate your offshore assets before the Automatic Exchange of Information (AEOI) comes into effect in 2017, we strongly recommend that you attend the FREE Brenthurst Wealth seminar on “UNDECLARED OFFSHORE ASSETS”.
This will be hosted in association with Hogan Lovells, on the 20 October 2016 at the Westin Hotel in Cape Town.
Do not hesitate to contact any of our financial planners to discuss your undeclared offshore assets” or your investment strategy.
Investments and Wealth creation is a long term commitment that requires a strategy and patience which rewards the disciplined investor.
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.
