Donations Tax Calculator

Donations tax is a flat tax on the value of property you give away for free — governed by Sections 54 to 64 of the Income Tax Act. It exists to stop people from sidestepping estate duty by gifting their assets out before they die, and to stop high earners from shifting taxable income to lower-bracket relatives.

The donor (you) pays the tax — not the person receiving the gift. Tax is due by the end of the month following the donation, declared on form IT144. Miss that deadline and SARS adds late-payment interest plus a 10% penalty under Section 89bis.

Every individual gets an annual donations tax exemption of R150,000. The exemption used to be R100,000 — SARS raised it from 2018 onward and it has held steady. Most family-level gifting stays comfortably under this threshold:

• Cash gifts to your kids for university fees, deposits, or weddings.
• A vehicle handed down to a teenager.
• Helping a sibling with a medical bill.

The exemption is per donor per tax year, not per recipient. Two parents can each gift R150,000 to the same child in the same year — R300,000 total, fully exempt. But the same parent can’t spread R150,000 across three kids and then give another R150,000 to a fourth in the same year.

Note that the R30 million threshold is cumulative across all years, not annual. If you donated R28m in prior years and another R5m this year, R3m of the new donation is at 25% (not the full R5m).

Section 56 lists categories that aren’t donations at all for tax purposes — you don’t even use the R150,000 exemption on these:

• Spousal donations. Gifts between spouses (married or in a civil union) are fully exempt. There is no cap. This is the legitimate way to even out estate value between partners for estate-duty planning.
• Section 18A PBOs. Donations to approved Public Benefit Organisations — registered charities, schools, religious bodies, disaster relief. The PBO must issue a Section 18A certificate; you keep it for SARS. Bonus: you also get an income-tax deduction up to 10% of taxable income.
• Maintenance for dependants. Reasonable support for children, an aged parent, or a disabled relative isn’t a donation — it’s a legal obligation.
• Bona fide bursaries to employees (or their relatives) within the Section 10(1)(q) limits.
• Donatio mortis causa — a gift conditional on the donor’s death. It falls under estate duty instead, not donations tax.

Two ways to soften that R70k bill: split the gift across two tax years (March cycle — R150k now and R350k in early March, two exemptions stacked back-to-back saves R30k), or have your spouse co-donate from joint funds (each uses their own R150k exemption — saves another R30k).

Companies and trusts don’t get the R150,000 individual exemption — they get a much smaller one (R10,000 for casual donations) and pay 20% on essentially the full value. This is why family wealth is rarely shifted out of a trust by gift; it’s done via the trust’s discretionary distribution mechanism instead.

Donations between connected companies in a corporate group are typically restructured using the Section 42–47 corporate-rule rollover relief, which side-steps donations tax entirely (different rules, different mechanic).

• Selling at undervalue counts as a donation. If you “sell” an asset to your kid for R1, SARS deems the difference between R1 and market value to be a donation. Use a written sale agreement at fair value if it’s actually a sale.
• Loans without market interest. Section 7C deems the foregone interest on an interest-free or low-rate loan to a trust to be a donation — taxed annually. The official rate is the SARS prescribed rate, currently around 9%.
• Forgetting the IT144. The exemption applies automatically up to R150k, but anything taxable triggers a filing requirement. Even if the recipient is your spouse and the donation is exempt, large transfers should still be papered for the audit trail.
• Donor pays, not recipient. If the donor doesn’t pay, SARS can collect the tax from the recipient under joint-and-several liability (Section 59). Sort it out upfront.

Enter your total donations for the tax year, the portion that went to approved PBOs (Section 18A — fully exempt), and the donor entity type. The calculator subtracts the exemptions, applies the 20%/25% rates, and shows the donations tax due. It uses the current 2026/2027 rates from the tax engine; switch the tax year selector to model historical years.

The result is the tax you (the donor) owe. The recipient receives the gift tax-free and doesn’t declare it as income. They will, however, inherit your base cost for capital gains tax — the gift doesn’t step up the cost basis.

• SARS — Donations Tax (overview + IT144 form)
• Income Tax Act — Sections 54 to 64
• SARS — Section 18A Public Benefit Organisations