Page 33 - Nexia SAB&T Estate Planning Guide 2024

4. The donation of assets situated outside the Republic, subject to certain
conditions.
5. Donations by companies not considered to be public companies up to
R10,000 per annum.
6. Donations where the donee will not benefit until the death of the donor.
7. Donations made by companies which are recognised as public companies for
tax purposes.
8. Donations cancelled within six months of the effective date.
9. Property disposed of under and in pursuance of any trust (i.e. distributions
made by the trust to a beneficiary).
10. Donations between companies forming part of the same group of companies.
11. Reasonable bona fide contributions to the maintenance of individuals.
Donations tax and estate planning
n By donating assets and incurring donations tax, the actual donations tax
paid reduces the estate planner’s estate, which may result in an estate
duty saving.
n Interest free loans
u An interest free loan is not regarded as a gift for the purposes of
donations tax, although it may activate the provisions of Section 7 (tax
avoidance provisions) and Section 7C dealing with interest-free or low
interest loans to trusts.
n Exemption of R100,000 per annum
u The estate planner may donate a maximum of R100,000 per annum
without attracting liability for donations tax.
u The R100,000 exemption is applicable per natural person, per annum.
u The R100 000 exemption could alternatively also be used to reduce the
deemed donation tax on interest-free or low interest loans to trusts.
u The estate planner could anticipate bequests by donating assets to his
heirs during his lifetime up to the maximum allowed per annum to natural
persons, thereby decreasing the value of his estate.
u The estate planner will need to evaluate as to whether losing control
over the asset during his lifetime is both practical and viable, given his
personal circumstances.

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