Project an offshore investment with rand depreciation and CGT on the rand gain.
Net value after CGT
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Gross value (R)
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Rand gain
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CGT
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Two engines of return, one tax bill
Investing offshore as a South African gives you two separate sources of return, and this calculator keeps them apart so you can see each one work. The first is the underlying investment growing in its own currency, here US dollars. The second is the rand losing value against that currency over time, which lifts the rand worth of every dollar you eventually bring home. Both push your rand outcome up. The tool grows your money in dollars, converts it back at a weakened exchange rate, and then estimates the capital gains tax SARS would levy on the rand gain.
That last point catches many investors off guard. A South African tax resident is taxed on worldwide gains, and the gain is always measured in rands. So even if your dollar investment moved very little, a falling rand can manufacture a sizeable rand gain that is fully within the CGT net. Currency depreciation is not a tax-free windfall; it is part of the gain.
R500,000 offshore for fifteen years
Take the defaults: R500,000 invested when the rand sits at R18.50 to the dollar, an 8 percent annual dollar return, the rand weakening 4 percent a year, over a 15-year horizon. The R500,000 buys about 27,027 dollars today. After fifteen years of dollar growth and rand depreciation, the rand value and its tax look like this, using the rates this calculator applies.
| Step | Amount |
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The tax is built up in stages: the gain above the annual exclusion has 40 percent included in taxable income, and the tool applies the 18 percent maximum effective rate that an investor on the top marginal rate would face. Your own bill could be lower, because the effective rate depends on your marginal rate, not everyone's. The chart splits the gross rand value into what you keep and what CGT takes.
What the model leaves for you to confirm
This is a clean projection, and the real world adds wrinkles it does not capture. The annual exclusion shelters a slice of gain each year, but you only get it once a year, so timing disposals matters. Foreign dividends along the way are taxed separately at a maximum effective 20 percent, not as part of this gain. Offshore platforms charge fees in dollars that quietly drag on the 8 percent return, and the rand does not depreciate on a tidy 4 percent line; it lurches, sometimes the other way. Treat the depreciation input as a long-run assumption to stress-test, not a forecast.
There is also a using-it-right point. This tool is for residents investing directly offshore in their own name, where the rand gain is taxable on disposal. If you invest through a rand-denominated feeder fund or an offshore endowment wrapper, the tax treatment differs, and an endowment in particular is taxed inside the fund at fixed rates rather than at your marginal CGT. Match the wrapper to the calculation before you rely on the number.
Is the rand depreciation taxed even if the dollar value barely grew?
Yes. SARS measures the gain in rands, so a weaker rand at sale raises your rand proceeds and therefore your gain, regardless of how the dollar value moved. This is why South Africans who held foreign assets through periods of sharp rand weakness can face a real CGT bill even on an investment that looked flat in dollars.
Do I use my offshore allowance for this?
Externalising funds uses your annual discretionary allowance and, beyond that, the foreign investment allowance which needs a tax clearance from SARS. Those are exchange-control limits on moving money out, separate from the CGT on the eventual gain. This calculator handles the tax on growth, not the clearance process, so confirm your remaining allowance and clearance requirements with your bank and SARS before transferring.