How donations tax is worked out
Donations tax applies when a South African resident gives property away for nothing. Property is any asset: cash, a car, shares, a house, or a right you give up, such as a loan someone owes you. Selling something for a price SARS regards as inadequate is treated as a donation too. The calculation has three steps. Take the market value of what you gave. Deduct whatever is left of your annual exemption, which earlier gifts in the same tax year may already have used. Tax the remainder at 20%, or 25% on any part that takes your taxable donations since 1 March 2018 above R30 million.
Worked example: helping a child with a deposit
Ayanda gives her son R400,000 towards a deposit on a flat on 17 October 2026. She has made no other gifts this tax year, so the full R150,000 exemption is available.
- Value of the donation: R400,000
- Less annual exemption: R150,000
- Taxable value: R250,000
- Donations tax at 20%: R50,000.00
- Due by: 30 November 2026
Ayanda pays the tax, not her son. If she wants to give him the next instalment without tax, she has to wait until 1 March 2027, when a fresh exemption becomes available.
Rates and exemptions for 2026/27
| Item | Amount |
|---|---|
| Annual exemption, individual donor | R150,000 per tax year |
| Casual gifts, company or trust donor | R20,000 per tax year |
| Rate on taxable donations up to the threshold | 20% |
| Rate on the part above the threshold | 25% |
| Cumulative threshold (since 1 March 2018) | R30,000,000 |
| Payment due | End of the following month |
Budget 2026 raised the individual exemption from R100,000, its first increase since 2007, and the casual gift limit for companies and trusts from R10,000. Both took effect on 1 March 2026.
Tax on gifts of different sizes
For an individual who has made no other taxable gifts in the tax year:
| Gift | Taxable value | Donations tax | % of gift |
|---|---|---|---|
| R100,000 | R0 | R0 | 0.0% |
| R150,000 | R0 | R0 | 0.0% |
| R250,000 | R100,000 | R20,000 | 8.0% |
| R500,000 | R350,000 | R70,000 | 14.0% |
| R1,000,000 | R850,000 | R170,000 | 17.0% |
| R5,000,000 | R4,850,000 | R970,000 | 19.4% |
Donations that are always exempt
Some gifts carry no donations tax at any value, and they do not use up your annual exemption:
- donations to your spouse, if your spouse is a South African tax resident
- donations to an approved public benefit organisation
- donations to national, provincial or local government
- contributions to someone's maintenance that SARS considers reasonable
- donations between companies in the same South African group
- a donation that is cancelled within six months of taking effect
The first four are options in the calculator; choose one and the tax drops to nil. Anything else, including gifts to children, grandchildren, a family trust or a friend, is an ordinary donation.
Timing gifts around the tax year
Because the exemption resets on 1 March, the date matters as much as the amount. Give R300,000 in one go in January and the tax is R30,000.00. Give R150,000 in February and another R150,000 in March, and each gift falls in a different tax year with its own exemption: the tax is R0.00. In law a donation takes effect on the date all the legal formalities for a valid donation have been met, and that date decides both the tax year and the payment deadline.
The R30 million cumulative threshold
The 25% rate is for large estates. SARS counts the taxable value of every donation you have made since 1 March 2018; gifts before that date are ignored, and in its draft ruling on the threshold SARS also leaves out exempt donations. Someone who has already given away R29 million in taxable donations and now gives R2,150,000 uses the R150,000 exemption, pays 20% on the next R1 million and 25% on the last R1 million: R450,000.00 in total.
Paying SARS
The donor completes form IT144, the declaration by donor or donee, and pays the tax by the last day of the month after the donation takes effect. Send the IT144 together with proof of payment. If the donor misses the deadline, SARS can collect from the donor and the recipient jointly. Late payment can also attract penalties and interest, which the SARS penalty calculator can estimate.
Donating an asset also triggers CGT
Giving away shares, a holiday home or crypto is a disposal for capital gains tax as well. SARS treats the asset as sold at its market value on the date of the gift, so you may owe CGT on the growth since you bought it as well as donations tax on the full value. The capital gains tax calculator handles that side. Cash gifts carry donations tax only. For the income tax tables that sit behind CGT, see the SARS tax tables.
Frequently asked questions
How much can I give away tax-free in South Africa?
An individual can give away R150,000 in total each tax year (1 March to the end of February) without paying donations tax. This applies from 1 March 2026; it was R100,000 before. The exemption is per donor, not per recipient, so gifts to three children share the same R150,000.
What is the donations tax rate?
20% on the taxable value of your donations up to a cumulative R30 million since 1 March 2018, and 25% on the part above R30 million. For almost all families the 20% rate is the only one that applies.
Who pays donations tax, the giver or the receiver?
The donor. If the donor does not pay by the due date, SARS can recover the tax from the donor and the person who received the gift jointly, so the recipient has an interest in seeing that it is paid.
When is donations tax due?
By the end of the month after the month in which the donation takes effect. A gift made on 17 October 2026 must be paid for by 30 November 2026. The donor submits form IT144 with proof of payment.
Is a gift to my spouse taxed?
No. Donations between spouses are exempt from donations tax, provided the spouse receiving the gift is a South African tax resident. There is no limit on the amount.
Do I pay donations tax on money I give to charity?
Not on a donation to an approved public benefit organisation. If the organisation also has section 18A approval and issues you a receipt, you can also deduct the donation from your taxable income, up to 10% of taxable income for the year.
Does supporting my parents count as a donation?
Bona fide contributions to the maintenance of another person are exempt, to the extent SARS considers them reasonable. Regular support for a parent who depends on you is one example. Anything beyond a reasonable amount for maintenance does not qualify and is an ordinary donation.
Do companies and trusts get the R150,000 exemption?
No. A company or trust is only exempt on casual gifts of up to R20,000 in total a tax year, up from R10,000. Donations between companies in the same South African group are exempt.