Giving/Loaning Money (Tax and other concerns?)

[RVQ]

A person close to me just recently lost their job and prospects of a new one is not looking good at the moment. While they busy in the process of cutting down significantly and claim everything is alright I'm on edge. I want to loan this person a large sum of money so they can pay into their home loan and arrange with their bank to pause payments until further notice. If I understand it correctly I can 'donate' up to 100K to anyone within one tax year without either party having to pay tax. I want to get this done by end Feb so if need be I can 'donate' again after 1 March should they need it again.

P.S. I'm not worried about breaking the golden rule of never loaning money to friends and family, this person goes beyond that rule.

 

[HavocXphere]

If it's a loan that they're repaying then the 100k doesn't matter.

The only "income" here is the notional interest they are "receiving". i.e. They are getting the benefit of an interest free loan...SARS attempts to charge tax on that sometimes.

On the whole it shouldn't be a problem.

 

[Tomtomtom]

Is it a loan or a donation? If it's a loan, you can go much higher than 100k, because the donation then is the "deemed interest". You can make a R 1.25 million loan at 8% and it's tax-free, since the donation itself is just interest, at R100k, and deductible.

But I'd expect you need to be prepared to demonstrate a reasonable prospect of repayment. Otherwise be prepared to be liable for the full amount minus R100k.