Does SARS tax donations made from a foreign source?
As you are no doubt aware SARS charges tax on any donation which a person makes to another person if the amount donated exceeds R100 000-00 in any tax year. This donations tax is currently running at 20%.
I recently did some research for a client who was about to receive a substantial donation (a half share in a house worth more than R2 million) from her life partner. He was a foreigner and he had no rights of residence here in South Africa.
What I established was that if a South African resident receives a donation from a foreign source, the whole of the donation is completely tax-free. Neither the donor nor the donee are liable for any tax here in South Africa. This worked out very well for my client.
16 Mar 2018
Author Miltons Matsemela