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DONATIONS TAX (ITA s54–64) - Coggle Diagram
DONATIONS TAX (ITA s54–64)
PURPOSE:
Transfer of wealth.
Not income tax
DEFINITIONS
Property – Any right in/to property
Donor / Donee
Donation – Gratuitous disposal
LIABILITY
20% (≤R30m), 25% (>R30m)
Pay by end of following month
Donor liable (joint with donee if unpaid)
EXEMPTIONS (s56)
Govt/PBO/Tribe
Property outside SA
Annual R100 000 (natural persons)
Bona fide maintenance
To spouse
DEEMED DONATION (s58)
• Disposal < adequate consideration
VALUATION (s62)
• Fair Market Value
• Farming – less 30%
• Limited Interests:
Usufruct / Fiduciary
Bare Dominium = FMV – usufruct value
Annuity = Annual × PV Factor
SPOUSES (s57A)
• Community: 50/50
• Separate: donor only
GT INTERACTION
• Donation = deemed disposal
• Add portion of donations tax to base cost (Par. 22)
EXAMPLE FLOW
Determine value
Apply exemptions
Apply rate 20%/25%
Compute CGT impact