Donations tax calculator

This calculator works out the donations tax on a gift. South Africa taxes the donor, not the recipient, at 20 per cent of the value given above an annual exemption, rising to 25 per cent once a person's lifetime donations since 2018 pass R30 million. The exemption for individuals rose from R100 000 to R150 000 for donations made from 1 March 2026, and a great deal of online advice still quotes the old figure. The calculator reads the current one from a dated rate table.

It is for parents helping children with a deposit, for anyone settling assets on a trust, for people planning to give during their lifetime rather than by will, and for the many who do not realise that an interest-free loan or a sale at a bargain price to a family member is a donation in the eyes of the Act.

What this calculator works out and who it is for

You enter the value of the donation, whether the donor is an individual or a company or trust, any other donations already made this tax year, the total taxable donations made since 1 March 2018 if you are anywhere near R30 million, and whether the gift is to your spouse or to an approved public benefit organisation. The calculator returns the exemption available, the taxable value, the split between the 20 and 25 per cent bands where relevant, the tax payable, and the cumulative figure after this gift. Where the gift is exempt in full, it says so and why.

It is a donations tax calculator only. It does not deal with the income tax, capital gains tax or transfer duty consequences of a gift, which can be larger than the donations tax itself.

How the calculation works

The calculator first checks the two complete exemptions: a donation to a spouse and a donation to an approved public benefit organisation are exempt without limit, and the tax is nil.

Otherwise it applies the annual exemption. For a natural person, the first R150 000 of property donated in a tax year is exempt; the exemption is one allowance for the whole year, so earlier gifts in the same year use it up, and the calculator subtracts what you have already given. For any other donor, a company or a trust, only casual gifts up to R20 000 a year are exempt. The taxable value is the donation less whatever exemption remains.

The rate depends on the donor's cumulative taxable donations since 1 March 2018. Up to R30 million cumulative, the rate is 20 per cent. Above R30 million, it is 25 per cent. The calculator takes the cumulative figure before this gift, works out how much of this gift falls below the R30 million line and how much above, and applies each rate to its portion. For almost everyone the whole gift is at 20 per cent; the calculator shows the split only where the line is crossed.

The law behind the numbers

Part V of the Income Tax Act 58 of 1962, sections 54 to 64, imposes donations tax. Section 54 levies the tax on the value of any property disposed of under any donation by a resident. Section 55 defines a donation as any gratuitous disposal of property, including a disposal for consideration that is inadequate, so that a sale of a R2 million house to a child for R500 000 is a donation of R1 500 000. Section 59 makes the donor liable, and section 60 requires payment by the end of the month following the month in which the donation takes effect, on the form SARS prescribes; if the donor does not pay, the donor and the donee are jointly and severally liable.

Section 56 lists the exemptions. Section 56(1) exempts, among others, donations between spouses, donations to the state and to approved public benefit organisations, donations to a trust for a disabled person, property disposed of under a court order on divorce, and bona fide contributions towards the maintenance of a person which the Commissioner considers reasonable. Section 56(2)(a) exempts casual gifts by a donor other than a natural person up to R20 000 a year in total. Section 56(2)(b) exempts the first R150 000 of property donated by a natural person in a year of assessment, for donations made on or after 1 March 2026; for earlier donations the figure was R100 000. Section 64 sets the rate at 20 per cent of the value of property donated, except that where the aggregate value of property donated since 1 March 2018 exceeds R30 million, the rate on the excess is 25 per cent.

Three related provisions catch people. Section 7C treats an interest-free or low-interest loan by a natural person, or a company at the instance of a natural person, to a trust or to a company owned by a trust as a continuing donation of the interest foregone, measured at the official rate, which uses up the annual exemption each year. Section 58 treats property disposed of for inadequate consideration as a donation of the shortfall. And the Eighth Schedule treats a donation as a disposal for capital gains tax at market value, so the donor of an appreciated asset pays CGT as well as donations tax, although section 56(1)(b) and paragraph 67 give roll-over relief for transfers between spouses. The guide to estate duty explains why lifetime giving is nonetheless used to reduce estate duty, and the executor fees and estate duty calculator shows the duty saved.

A donation of foreign property by a resident is taxed; a donation by a non-resident is not. A donation to a non-resident spouse loses the spousal exemption.

Worked example

Themba gives his daughter R500 000 towards a flat in October 2026. He has made no other gifts this tax year and nothing of substance since 2018.

The first R150 000 is exempt. The taxable value is R350 000, and at 20 per cent the donations tax is R70 000, payable by Themba by 30 November 2026. His cumulative taxable donations since 2018 are now R350 000, far from the R30 million line. The calculator points out that had he given R150 000 in February 2027 and the balance in March 2027, each in a different tax year, two exemptions would have applied, and that a gift structured as R150 000 a year over several years carries no donations tax at all, at the cost of his daughter waiting.

Suppose instead Themba is a wealthy man who has already made R29 900 000 of taxable donations since 2018. The R350 000 taxable value is split: R100 000 falls below the R30 million line at 20 per cent, which is R20 000, and R250 000 falls above it at 25 per cent, which is R62 500, for a total of R82 500. Suppose instead the donor is Themba's family company giving R50 000 to his daughter: only R20 000 is exempt, R30 000 is taxable at 20 per cent, and the company owes R6 000. Suppose instead Themba gives the R500 000 to his wife: exempt in full, no tax, no return needed.

What the calculator does not include

It does not value the property donated. For cash the value is the amount; for property it is fair market value, and for a sale at undervalue it is the shortfall.

It does not calculate the section 7C deemed donation on a low-interest loan to a trust, which depends on the loan balance, the official rate and the interest actually charged. It warns you that the deemed donation exists and shares the annual exemption.

It does not calculate capital gains tax on the disposal, transfer duty on a donated property, or the income tax consequences for the recipient, which are usually nil but not always.

It does not deal with the exemption for reasonable maintenance of a dependant, which depends on the Commissioner's view of what is reasonable.

It does not deal with donations by a trust to its beneficiaries, which are distributions rather than donations where made under the trust deed.

When to get advice

A straightforward cash gift to a child within the exemption needs no advice. Get advice before donating property that has appreciated, because the CGT can dwarf the donations tax; before making or restructuring a loan to a trust, because section 7C runs every year; before selling an asset to a family member at a discount; before donating to a non-resident; and before any gift above a few hundred thousand rand that is part of estate planning, where the interaction between donations tax at 20 per cent now and estate duty at 20 per cent later is the whole question. File the IT144 and pay on time: the penalty and interest regime applies, and the donee's joint liability means a late payment becomes the recipient's problem too.

Frequently asked questions

How much can I give tax-free each year? From 1 March 2026 an individual may donate R150 000 of property in a tax year without donations tax, up from R100 000. The exemption covers all your donations in the year together. A company or trust may make casual gifts of up to R20 000 a year.

What is the donations tax rate? 20 per cent of the value donated above the exemption. Once your cumulative taxable donations since 1 March 2018 exceed R30 million, the rate on the excess is 25 per cent.

Who pays donations tax? The donor, by the end of the month after the donation, on form IT144. If the donor does not pay, the donor and recipient are jointly and severally liable.

Are gifts to my spouse taxed? No. Donations between spouses are exempt without limit while the recipient is a resident. Spouse includes a partner in a permanent relationship the Commissioner is satisfied is intended to be permanent.

Is an interest-free loan a donation? A loan to a trust, or to a company owned by a trust, at less than the official interest rate is treated under section 7C as a donation of the interest foregone, every year, and uses up the annual exemption. An interest-free loan to an individual is not a deemed donation under section 7C, but SARS can treat a loan never intended to be repaid as a donation.

Is selling my house to my child cheaply a donation? Yes, to the extent of the difference between the market value and the price. Section 58 treats inadequate consideration as a donation of the shortfall.

Does a donation reduce my estate duty? Yes. Property given away is out of your estate, and the annual exemption lets you move R150 000 a year out of it free of both taxes. Above the exemption you pay 20 per cent now instead of 20 per cent later, which is usually only worth it for assets expected to grow.