Does the person receiving the gift pay tax?

No. Donations tax is the donor's liability. The recipient receives the asset without a donations tax charge, although they may face other taxes later, for example capital gains tax if they sell an asset that has grown in value.

Can I give my spouse a large sum without donations tax?

Yes. Donations between spouses are exempt under s56(1), regardless of the amount. The exemption applies to the gift itself, not to any income the asset later produces.

How much can I give away each year tax-free?

A natural person can donate up to R150,000 in property each year of assessment with no donations tax (s56(2)(b)). This is a single annual allowance spread across all your donations for the year, not a separate amount per recipient.

Is donations tax the same as the section 18A deduction?

No. Donations tax is a tax the donor may owe on giving an asset away. The section 18A deduction is an income-tax deduction you may claim for donating to a qualifying organisation. A single gift to a PBO can be exempt from donations tax and still be relevant for an income-tax deduction under the separate section 18A rules.

When must I pay donations tax?

By the end of the month following the month in which the donation took effect, or a longer period SARS allows (s60(1)). You declare it on form IT144 and pay through eFiling. If you are giving away shares or fixed property, the donation may also have capital gains tax consequences, which we cover in the guide to tax on selling property or shares in South Africa. To see how a donation fits alongside your wider income tax position for the year, you can work through the figures in the basic income tax calculator.

- https://www.sars.gov.za/types-of-tax/donations-tax/

Donations Tax in South Africa: Rates and Exemptions

Donations tax is paid by the person giving an asset away, not the person receiving it. The donor pays 20% on the total value of property donated in a year of assessment, rising to 25% on the portion above R30 million, after the first R150,000 each year is exempt. It is a separate tax from the section 18A income-tax deduction you claim for giving to a charity, and separate from estate duty, which applies to what you leave at death rather than what you give while alive.

Who pays and on what

Only South African residents are liable for donations tax. The tax falls on the donor, the person making the gift, and not on the recipient. So if you give cash, shares, property or any other asset to someone for nothing (or for less than its value), you are the one who deals with SARS.

A donation is any gratuitous disposal of property: you part with something and receive nothing in return. The tax is charged on the value of the property donated.

The rates and the annual exemption

For a natural person, the first R150,000 of property donated in each year of assessment is exempt (s56(2)(b)). You apply this exemption once per year across all your donations, not per gift and not per recipient.

After the exemption, the rate is 20% on the aggregated value of property donated up to R30 million, and 25% on the value above R30 million (s64(1)).

Aggregated donations in a year	Rate
First R150,000	Exempt
Up to R30 million (after exemption)	20%
Above R30 million	25%

Companies and trusts do not get the R150,000 exemption. For non-natural persons, only casual gifts up to R20,000 per year are exempt (s56(2)(a)).

A worked example

A parent donates R400,000 in cash to an adult child in one year of assessment, having made no other donations that year.

Start with the donation and subtract the annual exemption:

R400,000 - R150,000 = R250,000 dutiable

The total is under R30 million, so the whole dutiable amount is taxed at 20%:

R250,000 x 20% = R50,000

The parent, as the donor, owes R50,000 in donations tax. It is payable by the end of the month following the month in which the donation took effect.

Donations that are exempt

Some donations carry no donations tax at all, regardless of value. Under s56(1), exempt donations include:

Donations between spouses.
Donations to approved public benefit organisations (PBOs).
Donations to any sphere of government.
A donation that is cancelled within six months of taking effect.

The spouse exemption is the one most often used in planning. A gift from one spouse to the other carries no donations tax, whatever its size. This is distinct from the section 18A deduction: giving to a PBO can be exempt from donations tax here, while a separate set of rules under section 18A may let you claim an income-tax deduction for the same gift. The two regimes are read separately, and you can read more in our note on the section 18A donation tax deduction.

How to declare and pay

You declare a donation on form IT144 and pay by the end of the month following the month in which the donation took effect, or a longer period that SARS allows (s60(1)). Payment is made through eFiling.

Because the exemption resets each year of assessment, larger gifts are sometimes spread across more than one year so that more of the R150,000 exemption is used. That is a timing decision, not a way to escape the tax on the dutiable portion.

Donations tax versus estate duty

Donations tax and estate duty are often confused because both deal with passing assets to other people. The line is simple: donations tax applies to gifts you make while you are alive, and estate duty applies to the assets in your estate when you die. A gift made during your lifetime is a donation; the same asset left in your will is part of your estate. If you want to understand what happens to assets at death, see our article on whether inheritance is taxed in South Africa.