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RECAP: 4 Donations that are completely tax-exempt?

by , 22 April 2016
As the general rule goes, you're liable for donations tax at a rate of 20% per donation.

As an individual (natural person) however, you can donate the first R100 000, tax-free, per year of assessment, while a company is allowed R10 000 per year of assessment, after which a 20% tax rate is applicable.

But did you know that certain donations are completely tax-exempt?

That's right! Here are 4 of them...

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Tax-exempt donation#1:
Donations that are cancelled within 6 months of the donation's effective date will not apply for tax.
For example, a company wishes to donate an amount to a charity organisation which it later finds is a scam. They can cancel the amount without having to pay donations tax. And if they already have paid donations tax, they can claim it back.
Tax-exempt donation#2:
Donations made in contemplation of death will not apply for donations tax.
For example, a gravely-ill lady, who's on her last breaths while lying in hospital, states that she wants her car to go to a charity focussing on cancer patients.
Tax-exempt donation#3:
Donations where the passing of a benefit is suspended until the death of the donor are tax-exempt.
For example, an old couple, who own a farm, tell a local animal shelter (for abused farm animals) that when they've both passed on, they can have it.
Tax-exempt donation#4:
Donations to recreational clubs are tax-exempt.
For example, you could be a t-shirt manufacturer who donates a whole lot of them to your local tennis club.

*Those were 4 donations that are completely tax-exempt.
To learn of many other donations that are exempt from the 20% donation-tax rate, simply page over to D 03: Donations Tax in your Practical Tax Loose Leaf Service handbook.
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