Is a Cash Gift Taxable in South Africa

​In South Africa, a cash gift is subject to Donations Tax if it exceeds specific limits. Here’s how it works:

1. Donations Under R100,000
   As an individual, you can gift up to R100,000 per year without paying any tax. This is an annual exemption, meaning each tax year you get a fresh R100,000 limit. So, if your cash gift stays within this amount, it’s completely tax-free.
2. Donations Over R100,000
   If you give more than R100,000 in a tax year, the portion that exceeds this threshold is subject to 20% tax. For example, if you donate R150,000, the R50,000 that exceeds the limit will be taxed at 20%. However, if the total donation exceeds R30 million, the tax on the excess is increased to 25%. You can see the specific tax rates here.
3. Who Pays the Tax?
   The donor (the person giving the gift) is responsible for paying the donations tax, not the recipient. If the donor doesn’t pay, both the donor and the recipient can be held liable. You can read more about the responsibility for donations tax here.
4. Exemptions
   Some gifts are exempt from donations tax, such as donations to your spouse, a public benefit organisation, or certain government bodies. Additionally, donations made as part of someone’s maintenance or reasonable living expenses may also be exempt. You can find more about the exemptions in the official SARS guide here.
5. Legal Implications
   If you’re considering making a large cash gift, it’s important to understand your obligations. Failure to comply with the rules can result in penalties, especially if the donation exceeds the exempt amount or if there’s non-disclosure. For more insights on how to handle large donations, you can visit MoneyWeb’s guide or Investec’s financial advice page.

Always make sure to consult a financial advisor or tax consultant if you’re unsure about any part of the process!