This page approaches a private clients banking relationship from the tax and compliance side, because that is where the real value and the real risk sit for anyone with a business, a trust, offshore exposure or an estate to plan.
The qualifying criteria are straightforward. What follows them — source of funds evidence, tax residency, exchange control and reporting — is where getting it wrong is expensive.
Business Requirements at a Glance
Typical criteria for a private clients tier.
- A qualifying gross annual income, or a qualifying net asset value
- Alternatively a recognised professional qualification, where the bank offers that route
- Be 18 or older with a valid South African ID, or a passport with a valid permit
- Successful FICA verification, including source of funds and source of wealth
- A clean credit record
- A SARS tax reference number and tax affairs in order
- Acceptance of the relationship fee structure
Registration and Legal Requirements
Enhanced due diligence applies. Higher-value relationships fall into a higher risk category under the Financial Intelligence Centre Act 38 of 2001, so expect to evidence not only who you are but where the money came from — source of funds for specific amounts and source of wealth for the accumulated position, documented rather than described.
Prominent influential persons — holders of senior public office and their family and close associates — attract further scrutiny under FICA regardless of the legitimacy of their affairs. That is statutory, not a judgement.
Tax residency is the question people get wrong. South African tax residents are taxed on worldwide income. Ceasing to be a tax resident is a formal SARS process with its own consequences, including a deemed capital gains disposal. Confirm your status with SARS or a registered tax practitioner — assuming your tax position follows your travel or your intentions is a costly error.
South Africa participates in the automatic exchange of financial account information, which means foreign accounts held by South African tax residents are visible to SARS. Non-disclosure is not a viable position, and voluntary disclosure before an audit produces a far better outcome than being found.
The bank will ask for tax information for its own reporting obligations, including tax residency self-certification. Answer it accurately — an incorrect self-certification is a problem in its own right.
Documents and Ownership Information Required
What a private clients relationship requires by way of documents.
- South African ID document or passport with a valid permit
- Proof of residential address for FICA
- Evidence of source of funds and source of wealth — sale agreements, share statements, trust distributions, inheritance documents
- Latest income tax assessment or a SARS tax compliance status PIN
- A statement of assets and liabilities
- Investment and other bank account statements
- Company documents where the relationship includes a business
- Trust deed and letters of authority where a trust is involved
- Tax residency self-certification for the bank’s reporting obligations
Tax, Licence and Compliance Requirements
Exchange control governs money moving offshore. The single discretionary allowance may be used each calendar year without tax clearance; the foreign capital allowance permits a larger amount and requires a SARS tax compliance status PIN obtained in advance. Confirm current limits with SARS and your authorised dealer.
The tax compliance PIN takes time. It is issued through eFiling and requires your affairs to be in order. Apply well before you need to transfer.
Every cross-border transfer is reported against a balance of payments category code. Give the correct purpose — a misdescribed transfer is a contravention and the record is permanent.
Where the relationship includes a business, the company’s own obligations run alongside — CIPC annual returns, beneficial ownership filing, income tax, provisional tax, VAT and employment taxes. A personal relationship with a bank does not simplify any of them.
Where a trust is involved, the trust has its own tax registration, its own returns and its own reporting obligations, and trustees have duties under the Trust Property Control Act supervised by the Master of the High Court. Trusts are also now subject to beneficial ownership reporting. A trust operated as the founder’s personal account is disregarded, which defeats its purpose.
Advice is regulated. Financial advice is given under the Financial Advisory and Intermediary Services Act 37 of 2002, and you are entitled to written disclosure of how the adviser is remunerated. Ask for it, especially where in-house products are recommended.
Keep records permanently for transfers, clearances and source of funds documentation. Queries arise years later and reconstructing an undocumented position is very difficult.
Process, Deadlines and Ongoing Obligations
Enter the relationship through a banker, having prepared source of funds and source of wealth evidence in advance — it will be asked for and having it ready shortens the process considerably.
Before relying on the relationship for anything structural — offshore investment, a trust, emigration planning — take advice from a registered tax practitioner. The interaction of exchange control, income tax, capital gains tax and estate duty is genuinely complex and bank advice is not tax advice.
- Prepare source of funds and source of wealth evidence in advance
- Confirm your tax residency status with SARS or a practitioner
- Answer tax residency self-certification accurately
- Understand that foreign accounts are visible through information exchange
- Apply for the tax compliance status PIN well before transferring
- Confirm current exchange control allowances with SARS and the bank
- Declare the correct purpose on every cross-border transfer
- Keep the business’s own compliance obligations current
- Ensure any trust is administered properly and reports beneficial ownership
- Request written disclosure of how any adviser is remunerated
Frequently Asked Questions
Why is so much documentation required?
Higher-value relationships attract enhanced due diligence under FICA, requiring documentary evidence of source of funds and source of wealth rather than an explanation.
Does my tax position follow my travel?
No. Tax residency is a formal question with its own tests and processes, and ceasing to be a resident has consequences including a deemed capital gains disposal. Confirm it with SARS or a practitioner.
Are my foreign accounts visible to SARS?
Yes. South Africa participates in the automatic exchange of financial account information, so non-disclosure is not viable. Voluntary disclosure before an audit produces a far better outcome.
Is bank advice tax advice?
No. Financial advice is regulated under FAIS and is not a substitute for advice from a registered tax practitioner on exchange control, income tax, capital gains tax and estate duty.
Qualifying thresholds, FICA obligations, exchange control allowances and tax rules are set by the bank, the South African Reserve Bank and SARS, and are revised. Confirm current requirements with each and take advice from a registered tax practitioner.