A donation is when:
· You give something away for free;
· You get rid of something for a value less than its worth; or
· Your company disposes of property, at the request of any person, and that disposal would have been a donation if that person had made it.
Now, donations tax it tax SARS will impose on you if you dispose of your property.
'Property' can refer to money, homes, farms, cars, trademarks, shares and so on.
Having said that, here are 10 donations exempt from tax to reduce your tax bill:
These are donations that are made in contemplation of death, otherwise known as 'deathbed donations'.
Donations in which the benefit's passing is suspended until the death of the donor.
Donations which are cancelled within 6 months of the effective date of the donation.
Donations towards any traditional council, community or tribe.
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Any donations to the government in the national, provincial or local spheres.
Donations to recreational clubs. This could be, for example, shirts for a tennis club if you yourself manufacture them.
Donations by a company to another company that's resident and is a member of the same group as the company making the donation.
If the donation consists of a right to use property for farming (excluding fiduciary or usufructuary interest).
Donations under pursuance of a trust.
Donations of any right in property outside of South Africa in the following circumstances:
· He donor got the property before becoming resident;
· You inherited it from a person who wasn't a resident when he died;
· The donation came from the donor's funds as a result of selling the property in the first two circumstances.
So, there were 10 tax-exempt donations to keep in mind so as to possibly save yourself some money.
To find out what other tax-exempt donations there are, subscribe to the Practical Tax Loose Leaf Service.
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