What is a blocked account?
The bank will then open a blocked account for the client by either converting their current account that they have with the bank or open a new account to be converted.
All other South African Bank accounts held by the non-resident needs to be settled and closed. This includes credit cards, short term loans and overdraft current accounts.
The only exception to this will be home loan accounts on properties held in South Africa which may be kept open as long as it is shown to the bank how it will be serviced, i.e. rental income of the letting of the property in South Africa or funds from an overseas account in the event that rental income is not enough to cover the bond repayments.
Once the emigration status has been recorder by the South African Reserve Bank, all capital transfers of funds from South Africa must flow via this account offshore.
Any proceeds of the sale of remaining assets after emigration or rental income from properties still held in South Africa or any inheritance from a South African estate must be credited to this account.
The funds in this account may be used to maintain locally held assets for example a bond that is still held on any properties in South Africa or maintenance of such properties.
If there is a need to transfer any liquid assets (cash) then the Financial Surveillance Department of the South African Reserve Bank will consider such request on application.
In the event that an emigrant wants to withdraw funds from their South African pension fund or retirement annuity fund then such funds will be paid by the financial institution (upon approval) to the client?s blocked account from where it can be transferred to an offshore account.
Apart from the blocked account managed by the local bank in respect of funds the bank will also manage the following:
- All insurance policies,
- Share certificates,
- Deeds to fixed property in South Africa to be handed over to the bank for safe keeping.
These assets will be regarded as Blocked Assets.
The emigrant does not relinquish ownership of such Blocked Assets. The bank are merely the custodian of these assets so that they can manage the transfer of any funds via the blocked account to the emigrant in the event that any asset are disposed of.
Please note that any information on this website is prepared for general informational purposes only and is not intended to be relied upon as financial, accounting, tax, or other professional advice. Please refer to your advisors for specific advice.