DONATIONS TAX
WHAT IS IT? S54-S62
Tax on the value of any property1 that is donated2 by a South
African resident3
o Does not apply to non-residents of South Africa, even if they donate
SA assets.
NOT a tax on income but a tax on the net transfer of assets from
one person to another [transfer of wealth]
Rate:
o Levied at a rate of 20% on the value of the property donated if the
total value of all property donated by the person is </= R30 million
o Value of donated property that is in excess of R30 million will be
taxed at a rate of 25%
Timing:
o Not tied to a particular YOA and is payable on each donation
separately
o To determine the R30 million threshold: value of all of the donations
made after 1 March 2018 up until the date of the donation must be
considered
o Payable by the donor by the end of the month following that in
which the donation is made
o However, if the donor fails to pay the donations tax within the
prescribed period, the donor and donee become joint and severally
liable for the tax.
DEFINITIONS?
Donati Any gratuitous disposal of property or gratuitous
on waiver/renunciation of a right.
Gratuitous generally means that something of value is given without
payment or obligation or without receiving any value in return
[motivated by ‘pure liberality’ or ‘disinterested benevolence’]
❌ dividends or bad debts
Deeme
d
Donee The Beneficiary of a donation (person receiving the donation)
Fair MV Either:
- The price that would be obtained upon a sale of property
between a willing buyer and willing seller dealing at arm’s
length in an open market, or
- In relation to immovable property on which a farming
undertaking is carried on in South Africa, the fair market
value is 70% of the market value of the farming property.
WHAT IS IT? S54-S62
Tax on the value of any property1 that is donated2 by a South
African resident3
o Does not apply to non-residents of South Africa, even if they donate
SA assets.
NOT a tax on income but a tax on the net transfer of assets from
one person to another [transfer of wealth]
Rate:
o Levied at a rate of 20% on the value of the property donated if the
total value of all property donated by the person is </= R30 million
o Value of donated property that is in excess of R30 million will be
taxed at a rate of 25%
Timing:
o Not tied to a particular YOA and is payable on each donation
separately
o To determine the R30 million threshold: value of all of the donations
made after 1 March 2018 up until the date of the donation must be
considered
o Payable by the donor by the end of the month following that in
which the donation is made
o However, if the donor fails to pay the donations tax within the
prescribed period, the donor and donee become joint and severally
liable for the tax.
DEFINITIONS?
Donati Any gratuitous disposal of property or gratuitous
on waiver/renunciation of a right.
Gratuitous generally means that something of value is given without
payment or obligation or without receiving any value in return
[motivated by ‘pure liberality’ or ‘disinterested benevolence’]
❌ dividends or bad debts
Deeme
d
Donee The Beneficiary of a donation (person receiving the donation)
Fair MV Either:
- The price that would be obtained upon a sale of property
between a willing buyer and willing seller dealing at arm’s
length in an open market, or
- In relation to immovable property on which a farming
undertaking is carried on in South Africa, the fair market
value is 70% of the market value of the farming property.
