If you’re a trustee, adviser, or beneficiary trying to navigate cross-border structures, the rules around South African trusts and offshore flows can feel opaque. As at September 2025, the position is clearer: resident trusts still can’t invest offshore directly via the usual personal allowances, but may distribute funds to an offshore trust that’s a named beneficiary – provided SARS and your bank (as Authorised Dealer) sign off, and you’ve modelled the post-2024 tax implications. This guide summarises what’s allowed, what’s changed, and the practical steps to do it right.
1. Direct offshore investing by SA resident trusts: Not allowed via individual-style annual allowances.
2. Distributions to a foreign trust: Permitted (cash) if the foreign trust is a named beneficiary, SARS issues a Manual Letter of Compliance, and your bank processes the transfer under SARB rules.
3. Tax alert (from 1 March 2024): income vested in non-resident beneficiaries is taxed in the resident trust (often at 45%). Model before you move.
No … at least not directly. Trusts don’t have the R1m Single Discretionary Allowance or AIT-based foreign investment channels that individuals use. If you want global exposure inside the SA trust without exporting capital, consider asset-swap funds run by local managers (see “Alternatives”).
A South African resident trust may make a capital (or income) distribution to a foreign trust if:
The foreign trust is a named beneficiary in the SA trust deed; and
The trustees pass a distribution resolution that complies with the deed; and
SARS issues a Manual Letter of Compliance; and
Your Authorised Dealer (bank) processes the transfer under SARB rules.
Plain-English takeaway: This route isn’t an “allowance” – it’s a case-by-case approval that hinges on clean tax and proper paperwork.
Amendments to the conduit principle mean that income vested in a non-resident beneficiary (including a foreign trust) is taxable in the SA resident trust (generally at the trust rate). Practical implication: What used to be tax-efficient may now be costly. Before you distribute, compare the after-tax outcomes of:
1. Deed & resolution
2. SARS Manual Letter of Compliance
3. Authorised Dealer processing
4. Receiving trust onboarding
Asset-swap exposure (inside the SA trust):
Invest rands locally with a manager that uses institutional foreign capacity to buy offshore assets. You get global exposure; proceeds remain in rands. Useful where exporting capital is tax-inefficient or administratively heavy.
Individual allowances (outside the trust):
If appropriate, beneficiaries can receive distributions/loans and use their R1m SDA and AIT-approved transfers personally. This is not a trust allowance, but can be a cleaner route in some cases.
In-specie vs cash: Guidance and practice point to cash distributions. Treat in-specie transfers (shares/property) as not allowed unless you secure explicit approvals.
Quantum limits: No fixed hard cap is published, but documentation intensity rises with transaction size and risk. Expect deeper due diligence on larger amounts.
Do Read: Our piece of discretionary and family trusts and the role they play in estate and legacy planning
We model the after-tax outcomes, prepare the SARS documentation pack, and coordinate with your Authorised Dealer so you can choose the cleanest path—trust-to-trust distribution, asset-swap, or individual routes. Because this is a complex, highly specialised area, we also introduce clients to trusted tax specialists with cross-border expertise to ensure everything is done correctly (SARS, SARB, exchange-control documentation, and potential double-tax considerations).
Disclaimer: This article is general information, not advice. Exchange control and tax rules change—obtain professional advice before acting.
Carl-Peter Lehmann, CFP®, is a director at Henceforward Wealth & Family Office. He has 20+ years’ experience in wealth management, specialising in offshore investing and cross-border planning for South African families.
