Budget 2026: Single Discretionary Allowance Doubled to R2 Million

Exchange control relaxed further as Single Discretionary Allowance Doubled to R2 Million

The 2026 Budget delivered a meaningful win for South Africans with offshore investment ambitions. The single discretionary allowance has been doubled from R1 million to R2 million per person per year — the first increase in nearly 15 years.

For married couples, this is particularly significant: each spouse can utilise their full R2 million allowance independently, giving them a combined annual capacity of R4 million to invest offshore without Reserve Bank approval or an Approval for International Transfer (AIT) Tax Clearance certificate from SARS.

Why the Single Discretionary Allowance increase matters

To transfer funds above the discretionary allowance threshold, taxpayers must obtain an AIT Tax Clearance certificate from SARS — a process that is, in practice, slow and administratively demanding. Applicants must submit formal documentation including proof of tax compliance, details of the proposed transfer, and supporting financial records. Processing times can stretch for weeks and are often subject to additional queries. For many taxpayers, the AIT process functions as a deterrent to legitimate offshore investment — not because of cost, but because of friction and uncertainty.

The single discretionary allowance bypasses all of this entirely. A compliant taxpayer can instruct their bank to transfer up to R2 million offshore in a calendar year without engaging SARS at all. No pre-approval. No forms. No waiting.

An Overdue Correction, Not a Windfall

The allowance was originally introduced at R500 000 in 2008 and increased to R1 million in 2011. It was then left unchanged for almost 15 years — a period during which the rand lost significant value and inflation steadily eroded real purchasing power.

In that context, the new R2 million threshold is best understood as an overdue restoration of the allowance's original intent, rather than a new benefit. For South African families actively managing cross-border exposure, it largely brings the allowance back to where it should have been all along.

A Positive Step — But Reform Has Further to Go

The doubling of the single discretionary allowance is a clear signal that exchange control liberalisation remains on the policy agenda. South Africa, however, continues to operate within a tightly controlled exchange control framework that is increasingly out of step with global capital mobility norms.

Meaningful reform will ultimately require deeper simplification, greater certainty, and equal treatment across all taxpayer categories — resident and non-resident alike. Yesterday's announcement is a step in the right direction. It is not the finish line.