OPINIONISTA: The Financial Wellness Coach: Everything you need to know about moving money offshore

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Question: Over the past week, there has been a lot of talk about moving money offshore. I am concerned that this might be a kneejerk reaction and I would like your perspective. What are the benefits of moving money offshore, how much should I move and what should I be careful of?

The South African economy accounts for less than 1% of the world’s economy. It is risky putting all your eggs in one basket. I came across this model that I use as a discussion aid with my clients to decide how much they should have offshore.

If you look at the table below, you will see that global equity was the best-performing asset class over the past five, 10 and 15 years: Situs tax: This is like our estate duty. It is levied by the country in which the asset is located. If, say, you own shares registered on the British or American stock exchanges, these could be liable for a situs tax of up to 40% should you die. There are no spousal estate duty concessions like you have in SA. Your spouse may encounter cash flow problems.

 

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