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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part V: Donations Tax

56. Exemptions

 

(1)        Donations tax shall not be payable in respect of the value of any property which is disposed of under a donation—

(a) to or for the benefit of the spouse of the donor under a duly registered antenuptial or post-nuptial contract or under a notarial contract entered into as contemplated in section 21 of the Matrimonial Property Act, 1984 (Act No.88 of 1984);
(b) to or for the benefit of the spouse of the donor who is not separated from him under a judicial order or notarial deed of separation;
(c) as a donatio mortis causa;
(d) in terms of which the donee will not obtain any benefit thereunder until the death of the donor;
(e) which is cancelled within six months from the date upon which it took effect;
(f) made by or to or for the benefit of any traditional council, traditional community or any tribe referred to in section 10(1)(t)(vii);
(g) if such property consists of any right in property situated outside the Republic and was acquired by the donor—
(i) before the donor became a resident of the Republic for the first time; or
(ii) by inheritance from a person who at the date of his death was not ordinarily resident in the Republic or by a donation if at the date of the donation the donor was a person (other than a company) not ordinarily resident in the Republic; or
(iii) out of funds derived by him from the disposal of any property referred to in sub-paragraph (i) or (ii) or, if the donor disposed of such last-mentioned property and replaced it successively with other properties (all situated outside the Republic and acquired by the donor out of funds derived by him from the disposal of any of the said properties), out of funds derived by him from the disposal of, or from revenue from any of those properties; or

(iv)        [Subsection (1)(g)(iv) deleted by the Revenue Laws Amendment Act No. 31 of 2005];

(v)        [Subsection (1)(g)(v) deleted by the Revenue Laws Amendment Act No. 31 of 2005];

(gA)        [Subsection (1)(gA) deleted by section 26(a) of Act No. 90 of 1988];

(h) by or to any person (including any sphere of government) referred to in section 10(1)(a), (cA), (cE), (cN), (cO), (cQ), (d) or (e);

[Subsection (1)(h) amended by section 67(1) of Act No. 43 of 2014]

(i) [Subsection (1)(i) deleted by section 38 of Act No. 30 of 2000];
(j) [Subsection (1)(j) deleted by section 38 of Act No. 30 of 2000];
(k) as a voluntary award—
(i) the value of which is required to be included in the gross income of the donee in terms of paragraph (c), (d) or (i) of the definition of "gross income" in section 1; or
(ii) the gain in respect of which must be included in the income of the donee in terms of section 8A, 8B or 8C.
(l) if such property is disposed of under and in pursuance of any trust,
(m) if such property consists of a right (other than a fiduciary, usufructuary or other  like interest) to the use or occupation of property used for farming purposes, for no consideration or for a consideration which is not an adequate consideration, and the donee is a child of the donor;
(n) on or after the seventeenth day of August, 1966, by any company which is recognized as a public company in terms of section 38;
(o) where such property consists of the full ownership in immovable property, if—
(i)
(aa) such immovable property was acquired by any beneficiary entitled to any grant or services in terms of the Land Reform Programme, as contemplated in the White Paper on South African Land Policy, 1997; and
(bb) the Minister of Land Affairs or a person designated by him has, on such terms and conditions as such Minister may in consultation with the Commissioner prescribe, approved the particular project in terms of which such immovable property is so acquired; or
(ii) such immovable property was acquired by a person in terms of land reform initiatives by virtue of the measures as contemplated in Chapter 6 of the National Development Plan: Vision 2030 of 11 November 2011 released by the National Planning Commission, Presidency of the Republic of South Africa.

[Subsection (1)(o) of section 61(1) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016) - deemed to have come into operation on 1 March 2016]

(p) [Subsection (1)(p) deleted by Income Tax Act No 36 of 1996];
(q) [Subsection (1)(q) deleted by the Revenue Laws Amendment Act, 74 of 2002];
(r) by a company to any other company that is a resident and is a member of the same group of companies as the company making that donation.

 

(2)        Donations tax shall not be payable in respect of—

(a) so much of the sum of the values of all casual gifts made by a donor other than a natural person during any year of assessment as does not exceed R10 000: Provided that where the year of assessment exceeds or is less than 12 months, the amount in respect of which the tax shall not be payable in terms of this paragraph shall be an amount which bears to R10 000 the same ratio as that year of assessment bears to twelve months.
(b) so much of the sum of the values of all property disposed of under donations by a donor who is a natural person as does not during any year of assessment exceed R100 000
(c) so much of any bona fide contribution made by the donor towards the maintenance of any person as the Commissioner considers to be reasonable.