27four Investment Managers
19th December 2022
Maximising your annual offshore allowances
Many astute investors will tell you that a key component in being a successful investor is to diversify your portfolio across multiple asset classes, sectors, instruments, geographies, and currencies. Diversification provides your portfolio with downside protection during periods of uncertainty and allows you to mitigate risks while taking advantage of attractive global opportunities that exist.
Having a well-balanced, long-term strategy is essential for wealth creation. By investing offshore, South African’s can get exposure to growing industries in developed and emerging markets, maximising your potential for future returns. The question is, how does one obtain offshore exposure in your portfolio? Effectively, there are three ways of getting offshore exposure, namely:
- By investing in any of our Regulation 28 compliant funds, you would benefit from the 45% foreign investment allowance afforded to fund managers.
- Investing in a Rand denominated international feeder fund allows you to invest 100% into a fund that feeds into a global fund. The fund manager does the conversion into the foreign currency by using their asset swap facility and no SARS tax clearances are required by individuals.
- Lastly, you could invest directly offshore through a global fund of your choice, subject to limits imposed by The South African Reserve Bank (SARB) and South African Revenue Services (SARS).
Under the Exchange Control Regulations, The South African Reserve Bank (SARB) allows South African residents individuals a R1 million Single Discretionary Allowance (SDA) per calendar year, with no foreign tax clearance required from SARS. SARB also allows a further R10 million Foreign Capital Allowance (FCA) per calendar year, subject to a foreign tax clearance from SARS which is valid for 12 months. You could also make an application to SARB for a Special Approval for further discretions, should these be required. It is important to note that these allowances expire on the 31st of December every year, so make full use of your annual offshore allowances before the year end.
At 27four, we live investments.
We have a fund offering that caters for every investment objective. Our range of diversified, Regulation 28 and Shariah complaint funds are ideal for long-term wealth creation. For local investors seeking offshore exposure we have the 27four Global Balanced Fund of Funds, 27four Global Equity Fund of Funds and the 27four Global Equity Feeder Fund. Our consistent application of our investment approach is designed to deliver superior risk-adjusted performance over the long term.
Clients tend to have cognitive biases when making investment decisions. It is therefore essential to speak to your financial advisor before investing to ensure that your portfolio is appropriately diversified to meet your investment objectives.
If you have any questions or require assistance, we are available to take your call.
You can reach us on the contact details below:
Call: 0800 000 274
WhatsApp: “Hi” to 011 442 2467