Donations Tax Calculator South Africa - Calculate Gift Tax
Use this free calculator to work out how much donations tax you will pay on gifts of money, property, or assets in South Africa. It supports both 2025/26 and 2026/27 SARS donations tax years, including spouse and PBO exemptions plus the correct annual exemption for the year selected above.
Donations Tax Calculator
Quick Reference: Donations Tax for Individuals
Assuming no previous donations in the tax year and a non-exempt recipient. The selected tax year's annual exemption is applied.
| Donation | Exemption | Taxable | Tax Due |
|---|---|---|---|
| R100 000 | R100 000 | R0 | R0 |
| R200 000 | R150 000 | R50 000 | R10 000 |
| R500 000 | R150 000 | R350 000 | R70 000 |
| R1M | R150 000 | R850 000 | R170 000 |
| R5M | R150 000 | R4 850 000 | R970 000 |
| R10M | R150 000 | R9 850 000 | R1 970 000 |
* Companies, trusts, and other non-natural persons use the lower exemption for the selected tax year. Donations between spouses and to approved PBOs are fully exempt regardless of amount.
How Does Donations Tax Work in South Africa?
Donations tax is a tax levied on the donor (the person giving the gift) whenever property is disposed of for less than adequate consideration. In simple terms, if you give something of value to someone else for free or below its market value, SARS considers this a donation and the difference is subject to donations tax.
The tax is governed by Section 54 to 64 of the Income Tax Act, 1962. It is important to understand that donations tax is paid by the donor, not the recipient. However, if the donor fails to pay, SARS can hold the recipient jointly liable.
Donations tax applies to all South African tax residents on donations of any property, whether the property is situated in South Africa or elsewhere. Non-residents are only subject to donations tax on property situated in South Africa.
Every donation that is not specifically exempt must be reported to SARS and the tax must be paid by the end of the month following the month in which the donation took effect.
Donations Tax Rates
South Africa uses a two-tier rate structure for donations tax:
| Cumulative Taxable Donations | Tax Rate |
|---|---|
| First R30 million | 20% |
| Amount exceeding R30 million | 25% |
The R30 million threshold is cumulative over your lifetime, not per tax year. Most individuals will only ever encounter the 20% rate.
Donations Tax Exemptions
Several types of donations are fully or partially exempt from donations tax. Understanding these exemptions is critical for tax planning:
Fully Exempt Donations
- Donations between spouses (Section 56(1)(a)): There is no limit on tax-free donations between spouses. This includes cash, property, and any other assets.
- Donations to approved Public Benefit Organisations (PBOs) (Section 56(1)(h)): Donations to SARS-approved Section 18A organisations are fully exempt. The recipient must be registered with SARS as a PBO.
- Donations cancelled within 6 months (Section 56(1)(c)): If a donation is cancelled and the property returned within 6 months, no donations tax is payable.
- Maintenance of dependants: Payments for the maintenance of family members (food, clothing, housing, education, medical) are not considered donations.
- Donations at death (Section 56(1)(d)): Bequests in a will are not donations — they fall under estate duty instead.
Annual Exemptions
- Individuals (natural persons): R100,000 in 2025/26 and R150,000 in 2026/27.
- Companies, trusts, and other entities: R10,000 in 2025/26 and R20,000 in 2026/27.
- Political parties: Donations to political parties are exempt up to R15 million in aggregate per tax year.
Donating Property vs Cash
When donating property or non-cash assets, the value of the donation is determined by the fair market value of the property at the date of donation, minus any consideration (payment) received from the recipient.
For example, if you transfer a property worth R2 million to your child and your child pays you R500,000, the donation is R1.5 million (R2M - R500K). Donations tax would apply on the R1.5 million after deducting any available annual exemption.
For shares in a private company, the market value must be determined by an independent valuation. SARS may challenge the valuation if they consider it unreasonable. Using a qualified valuator is advisable for significant property or share donations.
Donations Tax vs Estate Duty
Donations tax and estate duty are companion taxes designed to prevent people from avoiding estate duty by simply giving away their assets before death. Both taxes apply at the same rates (20% up to R30 million, 25% above), but they apply at different times:
- Donations tax: Applies to gifts made during your lifetime.
- Estate duty: Applies to your estate when you die. The first R3.5 million of your dutiable estate is exempt (or R7 million with the spousal rollover).
One key planning consideration: donating assets during your lifetime reduces your estate for estate duty purposes. However, you pay donations tax immediately. The question is whether the time value of money and the estate duty abatement (R3.5M) make it worthwhile to wait. This depends on your personal circumstances, the size of your estate, and your age. Consult a tax advisor for estate planning decisions.
Note that loans to trusts are also subject to anti-avoidance rules. Section 7C of the Income Tax Act deems interest-free or low-interest loans to trusts as ongoing donations, with the foregone interest subject to donations tax annually.
How to Pay Donations Tax (IT144 Form)
When you make a taxable donation, you must:
- Complete the IT144 form: This is the Donations Tax Return, available on SARS eFiling or at your nearest SARS branch.
- Submit the IT144 to SARS: This can be done via SARS eFiling (efiling.sars.gov.za), which is the most convenient method.
- Pay the donations tax: Payment must be made by the end of the month following the month in which the donation was made. For example, a donation made on 10 April must be paid by 31 May.
- Keep records: Retain proof of the donation (agreement, valuation reports, transfer documents) and proof of payment to SARS for at least 5 years.
Common Donation Scenarios
Parent Giving Property to a Child
A parent who wants to transfer a house worth R2 million to their adult child under the 2026/27 tax year would face donations tax on R1.85 million after the R150,000 annual exemption, resulting in tax of R370,000. The parent may also face CGT on any capital gain. Consideration paid by the child reduces the donation value.
Setting Up a Trust
When you donate assets to a trust, donations tax applies on the full value above the annual exemption. Many people establish trusts with a nominal amount (e.g., R100) and then lend money to the trust at the official interest rate to avoid donations tax. However, Section 7C now deems interest-free or low-interest loans to trusts as donations, closing this loophole. Interest must be charged at the official rate (currently linked to the repo rate) to avoid deemed donations tax.
Donating to Charity
Donations to approved Public Benefit Organisations (PBOs) registered under Section 18A are fully exempt from donations tax, with no limit. The donor also receives an income tax deduction for the donation (up to 10% of taxable income). This makes charitable giving highly tax-efficient. Ensure the PBO provides a Section 18A receipt for your income tax deduction.
Wedding and Birthday Gifts
Casual gifts for occasions like weddings, birthdays, and holidays are generally covered by the annual exemption for individuals. That means up to R100,000 in 2025/26 or R150,000 in 2026/27, together with all your other non-exempt donations for the tax year.
Frequently Asked Questions
How much can I donate tax-free in South Africa?
As an individual (natural person), your annual exemption depends on the tax year. It is R100,000 for 2025/26 and R150,000 for 2026/27. Companies, trusts, and other non-natural persons use R10,000 for 2025/26 and R20,000 for 2026/27. Amounts above the exemption are subject to donations tax at 20%, or 25% for cumulative taxable donations above R30 million.
Is there tax on gifts between spouses?
No. Donations between spouses are completely exempt from donations tax under Section 56(1)(a) of the Income Tax Act. There is no limit on the value of donations between spouses. This applies to both married and common-law spouses. This exemption covers cash, property, and any other assets transferred between spouses.
Do I pay donations tax on property transfers?
Yes, if you donate (gift) property to someone other than your spouse or an approved Public Benefit Organisation, donations tax applies. The donation value is calculated as the market value of the property minus any consideration (payment) received from the recipient. For example, if you sell a property worth R2 million to your child for R500,000, the donation is R1.5 million. Note that property donations may also trigger Capital Gains Tax (CGT) as a deemed disposal at market value.
Who pays donations tax - the donor or recipient?
The donor (the person making the gift) is liable for donations tax, not the recipient. The donor must pay the tax to SARS by the end of the month following the month in which the donation was made. If the donor fails to pay, SARS can recover the tax from the recipient as a secondary liability. The donor must also submit an IT144 form to SARS to declare the donation.
Can I donate to my children tax-free?
You can donate up to your annual exemption to your children without paying donations tax. That exemption is R100,000 in 2025/26 and R150,000 in 2026/27 for natural persons. There is no special parent-to-child exemption above that amount.
What is the annual donations tax exemption?
The annual donations tax exemption is year-based. For natural persons it is R100,000 in 2025/26 and R150,000 in 2026/27. For non-natural persons it is R10,000 in 2025/26 and R20,000 in 2026/27. The exemption resets every tax year and applies to the total of all donations made during the year, not per recipient.
Is donations tax the same as estate duty?
No, they are different taxes but closely related. Donations tax applies to gifts made during your lifetime at a rate of 20% (25% above R30M). Estate duty applies to your estate when you die, also at 20% (25% above R30M). The first R3.5 million of your estate is exempt from estate duty. Strategically donating assets during your lifetime can reduce the value of your estate and therefore reduce estate duty, but you need to weigh the immediate cost of donations tax against the future saving on estate duty.
How do I declare a donation to SARS?
You must complete and submit a Donations Tax Return (form IT144) to SARS for every donation that is not exempt from donations tax. This must be done, and the tax paid, by the end of the month following the month in which the donation was made. For example, a donation made on 15 June must be declared and paid by 31 July. You can submit the IT144 via SARS eFiling. Late payment will incur interest and penalties.
Disclaimer: This calculator provides estimates based on current SARS donations tax rules and rates. Tax legislation is subject to change. The calculation does not account for Capital Gains Tax (CGT) that may also apply on property donations. For complex donations involving trusts, property, or large values, consult a registered tax practitioner. This tool is for informational purposes only and does not constitute tax advice.
Related Tools
Have a question about this tool?
Ask on WhatsApp
Click here to join our telegram channel and stay up to date with load shedding and related news!