In South Africa we are subject to donations tax, so simply giving away your assets or selling your assets for less than their actual market value, with no obligation to receive payment in return, may create a tax liability.
Donations tax is payable at a rate of 20% on the value of a property and must be paid by the Donor to the Receiver of Revenue within three months of the date of the donation. Some donations are free from donations tax – see the list provided in the Income Tax Act HERE.
Natural persons receive an annual donations tax exemption of R100,000; all other donors pay donations tax on any donation exceeding R10 000 during any year of assessment.
If you have further questions in this regard, contact us at STBB.