DONATION TAX

TO ALL ESTEEMED BUSINESS PARTNERS

Number

25/2016
In terms of the Income Tax Act, No 58 of 1962, donation tax is payable at a rate of 20% on the value of the property so donated,  and must be paid by the Donor to the Receiver of Revenue within three months of the date of donation. Cognizance must be taken of the fact that donation tax could also be payable when selling assets for less that it's actual market value.
 
The following donations are, however, exempt from donation tax:
  • Between spouses who are not separated;
  • Were the donee will not benefit until the death of the donor;
  • Which are cancelled within six months from the date upon which it took effect;
  • Of property which is situated outside the Republic and was acquired by the donor:
  • before becoming a resident of the Republic for the first time;
  • by inheritance from a non-resident of the Republic
  • Of property disposed of under and in pursuance of any trust provision;
  • Of property that consists of a right to use or occupy property that is used for farming purposes and the donee is a child of the donor;
  • To certain Public Benefit Organizations;
  • By any company which is recognized as a public company; and
  • Between companies that are members of the same group of companies
Natural persons receive an annual donation tax emption of R100 000,00. All other donors pay donation tax on any donation in excess of R10 000,00 during any year of assessment.

For any queries please contact our property law division at the details below:

Allen West
Tel: 012 425 3549
awest@macrobert.co.za

Daleen Loubser
Tel: 012 425 3489
dloubser@macrobert.co.za

Disclaimer: This newsflash is for general information only and should not be used as legal or professional advice. No liability can be accepted for any errors or omissions, nor for any loss or damage arising from reliance and any information therein