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Donations Tax - Coggle Diagram
Donations Tax
s56 Exemptions
(a) Donation to/for benefit of a spouse i.t.o. a registered ante-nuptial/post-nuptial
(b) Donation to/for benefit of a spouse not separated
(c) Donatio mortis causa - in anticipation of death
(d) Benefit only passes to donee on death of donor
(e) cancelled within 6 months
(g) Right in property situated outside S.A.
Acquired by donor before they became S.A. resident for the first time
Inherited by donor from person not resident at time of death
Donated by first donor (not resident) to current donor
Acquired out of funds derived from disposal of property referred above
(h) Exempt bodies
(k) Voluntary awards included in taxable income of donee
(l) Property disposed of under and in pursuance of trust
(n) By a public company for tax purposes
Valuation of property
General rule
value of property x 20% or 25%
value = fair market value
Annuity rule
Step 1) Annual value = annual amount of annuity
Step 2) Determine lesser of
Period of annuity
Donor remaining life expectancy
Donee remaining life expectancy
Step 3) Calc. PV of Annual value capitalised @ 12% p.a. over period in step 2
Usufruct
Step 1) Annual value = Property fair MV x 12%
Step 2) Determine lesser of
Period of usufruct
Usufructuary's remaining life expectancy
Donors remaining life expectancy
Step 3) Calc. PV of Annual value capitalised @ 12% p.a. over period in step 2
Bare dominium
Step 1) Annual value = Property fair MV x 12%
Step 2) Determine lesser of
Period of usufruct
Usufructuary's remaining life expectancy
Step 3) Calc. PV of Annual value capitalised @ 12% p.a. over period in step 2
Step 4) Fair MV - PV in Step 3
s54 Requirements
By a S.A. Resident
Disposed of under a donation
Property
s59 Person liable for tax
Donor
If donor fails to pay
Donor and donee jointly and severally liable
s64 Rate of donations tax
20%
aggregate of all donations on/after 1 March 2018 < R30 million
25%
aggregate >= R30 million
s60 Payment and assessment of tax
Payable by end of following month
s57 Disposals by companies under donations at the instance of any person
s57A Donations by spouses married in community of property
s62 Value of property disposed of under donations