Donation Tax on Bond Payment

[^^vampire^^]

Hi all

I've come to an arrangement with a relative that they will pay a large portion of my bond off (R400k) and then I pay them a lower percentage than I pay the bank. I was wondering though, if they pay the R400k into my bond account, will SARS expect to pay donations tax on this?

Thanks for any light you guys can shed on the situation.

 

[AchmatK]

No donations tax as it's a loan.

 

[rorz0r]

What signates said, however they might incur interest income that they might have to pay tax on. There's an exemption on interest earned up to R23,800 if they are younger than 65 or R34,500 if they are older than 65 but this would be a single figure that any other investments they have contribute towards. Then it also depends on what other income they earn as to which bracket they'd fall into etc. It's not likely to be much though.

 

[^^vampire^^]

Thanks, forgot they can structure it as a formal loan. Will have to see what they say.