Unit 5 - Donations Tax Exemptions

Question 1

What donations are exempt under s56(1)?

Answer 1

1. Donation to spouse
2. A donatio mortis causa (Donate IF die)
3. Donation upon death (Donate WHEN
   die)
4. Donation which is cancelled within 6
   months of the date upon which it took
   effect
5. A donation made by/to/for the benefit of
   any traditional council/community/tribe
6. Donation of a right to any property
   situated outside R, if such property was
   acquired by the donor:
   
   • Before the donor became a resident of
     the R for the 1st time
   • By bequest/inheritance from someone
     who was NOT ORDINARILY RESIDENT
     @ date of their death
   • Donation from a person (excl.
     company) who was NOT ORDINARILY
     RESIDENT in R on the date of donation
   • From funds obtained from the sale of
     property in the 3 points referred to
     above, or if the donor sold such
     property & replaced it with other
     properties (located outside the R,
     financed from the sale of foreign
     property)
7. Donations to special bodies
8. Voluntary awards - the value of which
   has been incl. in GI of donee & gain iro
   which must be incl. in the income of
   donee ito s8A/8B/8C
9. Donation by a trust to a beneficiary
10. Donations of a right of use of farming
    property to the child of the donor (other
    than a fiduciary, usufructuary/other like
    interest.
11. Donations made by public company ito
    s38
12. A donation of immovable property, if
    such property was acquired by any
    beneficiary entitled to any
    GRANT/SERVICE ito Land Reform
    Programme & minister of Land Affairs
    approved the project.
13. A donation of immovable property, if
    such property was acquired ito land
    reform initiatives by the National
    Development Plan: Vision 2030.
14. Donations btw companies in the same
    group.

Question 2

What donations are exempt under s56(2)(a) - Casual gifts made?

Answer 2

Any casual gifts made by a donor (other than a natural person) during YoA not
< R10 000 each year
- Apportionment may be applied

Question 3

What amount of donations are exempt under s56(2)(b) - Annual Donations tax exemption?

Answer 3

The sum of the values of all property donated by a natural person during YoA not < R 100 000
- No apportionment may be applied

Question 4

Donations made by spouses married in community of property.

Answer 4

Joint estate = 50/50

Joint estate exemption = R200 000 each year

Question 5

What donations are exempt under s56(2)(c) - Contributions to maintenance of an individual?

Answer 5

Any bona fide contribution made by a donor towards the MAINTENANCE of any person as the Commissioner considers reasonable.