Donations tax explained

The rates

Donations tax is 20% of the value donated, on the first R 30 million of taxable donations made since 1 March 2018, and 25% above that. It is paid by the donor. If the donor doesn’t pay on time, the donor and the person who received the gift are both liable.

What is exempt

• The first R 150 000 donated by an individual in each tax year.
• Gifts to a spouse.
• Donations to approved public benefit organisations (approved under section 30) and to government.
• Casual gifts of up to R 20 000 a year by companies and trusts.
• Reasonable support of someone you maintain, such as paying a child’s school fees.

An example

A parent gives a child R 250 000 towards a home deposit in one tax year. The first R 150 000 is exempt, so donations tax is 20% of R 100 000: R 20 000. Spreading the gift over two tax years, R 150 000 and R 100 000, would mean no donations tax.

Paying it

Donations tax is due by the end of the month after the month the donation takes effect. You declare it on an IT144 form and pay it on eFiling.

Donations tax and estate duty

Gifts during your life reduce the estate that is taxed at death, at the same 20% and 25% rates. Using the R 150 000 exemption every year can move money out of an estate over time without donations tax. Compare with the estate duty calculator.