Donations Tax

[Candystore]

A mother donates money to her child (not a minor anymore) monthly, via bank deposit.

1. Is it correct that the donations are taxable in the hands of the recipient?
2. At a rate of 20%?
3. And only the first R100 000 is exempt?
4. Could it be structured as a loan to avoid tax liability?

Thank you.

 

[F1 Fan]

1. Either the donator or recipient can pay the tax.
2. Yes. 25% over R30m
3. Correct. However the R100 000 is an annual exemption.
4. Yep. Loan it, and "write off" R100k per year equal to the annual exemption. In reality, unless it is huge sums, SARS is not going to come asking.

 

[BuckRogers]

You can do R100k per year. She can also buy your fancy leather furniture from you for R300k

 

[Koosvanwyk]

A mother donates money to her child (not a minor anymore) monthly, via bank deposit.

1. Is it correct that the donations are taxable in the hands of the recipient?
2. At a rate of 20%?
3. And only the first R100 000 is exempt?
4. Could it be structured as a loan to avoid tax liability?

Thank you.

The person making the donation (donor) is liable to pay the donations tax, however if the donor fails to pay the tax then they are jointly and severally liable. Payment of the tax is generally due in the month following the donations.

 

[Harmonic]

It's 100k per year exempt but this comes from post tax money on the donators side