Please enable JavaScript.

Coggle requires JavaScript to display documents.

DONATIONS TAX, Formula for D.tax: FMV - exemptions (general/specific),…

- - - - Tax paid by donee can be recovered from donor
- - - - donation made to spouse who pays lower tax to avoid tax: cap gain will be taxed in the hands of the donor spouse
  - - - must be at SARS discretion
  - - - Indicators
        
        Selects donee
        
        Usually a CP
        
        Majority SH
- - - - asset is given to you, however you must transfer it to someone else at a later stage and in absence of such person you become the owner
        
        e.g. Peppa gives her friend (Suzi) a dinosaur (collectors item) which she must give to Peppa's brother (George) upon her death
        
        Suzi although not the owner has a ROU over the dinosaur but cannot sell it. She has a fiduciary duty to transfer it to George when Peppa passes on. If George also passes on before Suzi, she will become the owner of the collector's item
    - - right to use an asset (ownership remains with the main owner until they pass on- then full ownership becomes yours )
        
        however, you will have full ownership over the fruits produced by the tree (asset) even though you don't own it. In essence you are usufructuary.
  - - - Determine the FMV, 2. annualize it (x12%) if it is not already at the annual amount, 3. find PV factor at next HBD using life expectancy tables (lower of donee and donor and PV of fixed period of usufruct) 4. (S2 x S3)
        
        for S3, if there's a fixed period, use CMPD Func.
        
        n=fixed period, i=12%, PMT=1, FV=0
    - - difference is that amount is already annualized (p.a)- no need to x12%
    - - same calc as usufruct except for S3. Must be the lower of usufructuary's (donee) life expectancy and fixed period of the usufruct (ROU)
        
        VALUE= S3 - S1
      - having ownership without usufruct (right to use asset)
- - - - by inheritance/donation from NR
      - using funds from disposal of the above (1 & 2)
      - before donor became a SA resident
  - - - applies to NP
        
        reduce the R100K per donation in the YOA in order
        
        spouses married in COP get R100k each (total =R200k limit)
    - - applies to companies
        
        apportion where YOA is < 12months