asset manager of Credit Suisse in
Switzerland, can provide its clients
with offerings.”
Vestact recommends using a local
partner when venturing directly
offshore. “To have someone on
home turf who is responsive, and
deals with your investment and
admin queries, is most beneficial”
says Theron. “Vestact also advises
South African retail clients on what
they should be buying, and our
theme-based investment approach
favours companies which we think
will benefit most from the really
big economic trends over the next
few decades. We like technology,
healthcare and consumer stocks,
preferring the bigger, wellestablished companies, and we
suggest a long-term hold and
accumulate strategy.”
Theron also notes that getting
money offshore can be expensive,
due to currency and bank transfer
charges. “So it makes sense to
invest amounts of at least R100 000
at a time.”
Investors also need to consider
which markets they want to access
and just how global they want to go.
BACK TO SARS
WHAT DOES IT COST?
South Africa follows a worldwide
tax regime, so all offshore interest,
dividends, trading income and
capital gains/losses need to be
declared and taxed in SA. Certain
offshore jurisdictions may withhold
non-resident taxes and these would
be offset against the SA tax liability.
Vestact indicates its fees are similar
to those on local JSE accounts,
namely brokerage on trades
starting at 1.5%, with a minimum of
$51 per trade, and an annual asset
management charge of 1%, paid in
twelve equal monthly instalments.
Doidge points out a notable change
to tax rules affecting how SA
taxpayers translate capital gains
or losses on foreign investments.
“Prior to January 2013, the base cost
of a foreign investment would be
translated into Rands at rates ruling
at time of acquisition; disposal
proceeds would be translated into
Rands at time of sale; and then the
gain or loss calculated in Rands.
It is now simplified, and SARS
requires that the resultant gain or
loss on a foreign investment be
calculated directly in the foreign
currency, and then translated into
Rands. This ensures that only hard
currency gains are subject to tax
as opposed to any increase in the
initial investment value purely due
to Rand depreciation.”
RealFin’s Doidge points out that
if investors go the indirect route
using products offered by local
institutions this comes at a cost, and
charges for using the institutions’
allowances are built into their
fee structures.
ARE SOUTH AFRICANS UP
FOR THIS?
Theron comments that the direct
offshore investment route is
seeing healthy uptake. “South
Africans are keen to own equities
offshore, and the weaker Rand
has people rushing to externalise
their savings.” ■
Investors need to seek best risk adjusted opportunities, which may be offshore
ISSUE 6 – SEPTEMBER 2015
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