IC Markets
The Single Discretionary Allowance is the simplest way for a South African resident to move money offshore. The 2026 Budget doubled it from R1 million to R2 million a year, and the Reserve Bank gave that effect through exchange-control circulars in April 2026. For a forex trader it is the allowance that a broker deposit normally runs against. This guide covers what it can be used for, how it works in practice, and its limits.
What the SDA covers
The SDA is a no-tax-clearance facility for residents aged 18 and older, resetting every 1 January, that can be used for almost any legal purpose abroad. That includes travel, gifts and maintenance, offshore property and investments, and funding a foreign trading or brokerage account. You do not apply for it in advance. You instruct your bank, the bank checks you have room in the allowance, processes the transfer and reports it to the Reserve Bank.
- R2 million per calendar year, per person.
- No SARS Tax Compliance Status PIN required.
- Covers trading-account funding, offshore investment, travel, gifts and more, drawn from the same pool.
- Resets on 1 January. Unused allowance does not roll over.
- Children under 18 have a smaller travel-related allowance and cannot use the full SDA.
How funding a broker uses it
When you send rand from your South African bank to a broker account held offshore, the bank converts the money and debits the rand equivalent against your SDA for the year. If you send R20,000 to a broker in March, your remaining SDA for that year is R1,980,000. You will be asked the purpose; "trading account funding" or "investment" is standard. Withdrawals coming back from the broker do not restore the allowance you have used; the SDA measures money sent out, not your net position.
| Action | Effect on your SDA |
|---|---|
| Send R20,000 to an offshore broker | R20,000 used, R1,980,000 left this year |
| Broker pays R25,000 back to your account | No change to the allowance; it is not restored |
| Deposit R20,000 to a local ZAR broker entity | No effect; domestic transfer, allowance untouched |
| 1 January | Allowance resets to R2,000,000 |
Why it is rarely the real limit
A retail trader funding an account with a few thousand to a few tens of thousands of rand will not come close to R2 million in a year unless they are cycling very large sums in and out. If you find the SDA is actually constraining you, either you are trading with far more capital than most retail traders, or you are moving money in and out so often that transfer costs are quietly eating your returns. Either way it is worth a rethink. For almost everyone, the SDA is generous headroom and a non-issue.
Thabo worried he would run out of allowance in his first year. He funded his offshore account with R15,000, topped up twice more with R10,000, and withdrew profits back to his bank a few times. By December he had used R35,000 of his R2 million SDA. The allowance was never remotely a constraint. What did cost him was the international transfer fees on the small top-ups, which he later cut by moving to a broker with a local rand account.
If you are making frequent small offshore top-ups, the transfer fees matter more than the allowance. Fund in fewer, larger amounts, or use a broker with a local ZAR account so deposits are free domestic EFTs.
Record-keeping for SARS
The SDA transfer itself needs nothing filed by you. But SARS will want your trading profit calculated in rand, so record the rand amount, the date and the exchange rate for every deposit and withdrawal. Your bank statement and the broker's records together give you this, but it is far easier to log it as you go. The records guide has the full list.
The doubling of the discretionary allowance to R2 million got a lot of attention, but for a retail forex trader it changes almost nothing, because they were never near the old R1 million limit either. The useful habit is not tracking your allowance, it is logging the rand value and rate of every transfer for your tax return.
Frequently asked
How much is the Single Discretionary Allowance now?
R2 million per person per calendar year, doubled from R1 million in the 2026 Budget and given effect by Reserve Bank circulars in April 2026. It resets on 1 January and needs no tax clearance.
Can I use the SDA to fund a forex account?
Yes. Funding a foreign trading or brokerage account is a permitted use of the discretionary allowance. Your bank debits the rand equivalent against your allowance for the year.
Do broker withdrawals restore my allowance?
No. The allowance measures money sent offshore, not your net position. If you send R20,000 out, your allowance is reduced by R20,000 for the year even if the broker later pays you more back.
Will I run out of allowance as a retail trader?
Almost certainly not. R2 million is far more than a typical retail trader moves in a year. If the allowance is constraining you, transfer costs from frequent small transfers are probably a bigger problem.
Does using a local ZAR account use my SDA?
No. A deposit to a broker's South African entity is a domestic rand transfer and does not touch your discretionary allowance.