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Overview When a taxpayer donates an asset, the obvious tax consequence to consider is donations tax that could arise on the donation. However, a donation of an asset could give rise to a variety of other normal income tax consequences for the dono r and/or done. Many taxpayers make decisions based on the tax implications of the options available to them. If they do not identify all the relevant tax consequences, their decision will not be based on accurate information, and they might be out-of-pocket due to unforeseen tax consequences arising. Similarly, if a taxpayer receives an asset from another taxpayer, it is important that the taxpayer understand all the tax consequences that result from the donation received. Donations tax is levied on the transfer of wealth during the life of a person whereas estate duty is levied on the transfer of wealth to beneficiaries when a person passes away, through the deceased person’s deceased estate. Short course content (self-paced) Income Tax Consequences of Donations OUTCOMES OF TOPIC After studying this introduction to donations made and donations tax, you should be able to: Understand what a “donation” is. Understand what a “deemed donation” is. Understand the tax consequences when a donation is made. Understand how property donated will be valued for donations tax purposes. Understand what donations tax is and at what rate it is levied. Identify donations that are exempt from donations tax. Understand that donations will not necessarily have donations tax consequences only, but all other tax consequences should also be considered when donating.

Overview When a taxpayer donates an asset, the obvious tax consequence to consider is donations tax that could arise on the donation. However, a donation of an asset could give rise to a variety of other normal income tax consequences for the dono r and/or done. Many taxpayers make decisions based on the tax implications of the options available to them. If they do not identify all the relevant tax consequences, their decision will not be based on accurate information, and they might be out-of-pocket due to unforeseen tax consequences arising. Similarly, if a taxpayer receives an asset from another taxpayer, it is important that the taxpayer understand all the tax consequences that result from the donation received. Donations tax is levied on the transfer of wealth during the life of a person whereas estate duty is levied on the transfer of wealth to beneficiaries when a person passes away, through the deceased person’s deceased estate. Short course content (self-paced) Income Tax Consequences of Donations Contextualising donations tax Deemed donations. Exemptions from donations tax Calculation of donations tax and liability for donations tax value of donations OUTCOMES OF TOPIC After studying this introduction to donations made and donations tax, you should be able to: Understand what a “donation” is. Understand what a “deemed donation” is. Understand the tax consequences when a donation is made. Understand how property donated will be valued for donations tax purposes. Understand what donations tax is and at what rate it is levied. Identify donations that are exempt from donations tax. Understand that donations will not necessarily have donations tax consequences only, but all other tax consequences should also be considered when donating.

Overview When a taxpayer donates an asset, the obvious tax consequence to consider is donations tax that could arise on the donation. However, a donation of an asset could give rise to a variety of other normal income tax consequences for the dono r and/or done. Many taxpayers make decisions based on the tax implications of the options available to them. If they do not identify all the relevant tax consequences, their decision will not be based on accurate information, and they might be out-of-pocket due to unforeseen tax consequences arising. Similarly, if a taxpayer receives an asset from another taxpayer, it is important that the taxpayer understand all the tax consequences that result from the donation received. Donations tax is levied on the transfer of wealth during the life of a person whereas estate duty is levied on the transfer of wealth to beneficiaries when a person passes away, through the deceased person’s deceased estate. Short course content (self-paced) Deemed donations. OUTCOMES OF TOPIC After studying this introduction to donations made and donations tax, you should be able to: Understand what a “donation” is. Understand what a “deemed donation” is. Understand the tax consequences when a donation is made. Understand how property donated will be valued for donations tax purposes. Understand what donations tax is and at what rate it is levied. Identify donations that are exempt from donations tax. Understand that donations will not necessarily have donations tax consequences only, but all other tax consequences should also be considered when donating.

Overview When a taxpayer donates an asset, the obvious tax consequence to consider is donations tax that could arise on the donation. However, a donation of an asset could give rise to a variety of other normal income tax consequences for the dono r and/or done. Many taxpayers make decisions based on the tax implications of the options available to them. If they do not identify all the relevant tax consequences, their decision will not be based on accurate information, and they might be out-of-pocket due to unforeseen tax consequences arising. Similarly, if a taxpayer receives an asset from another taxpayer, it is important that the taxpayer understand all the tax consequences that result from the donation received. Donations tax is levied on the transfer of wealth during the life of a person whereas estate duty is levied on the transfer of wealth to beneficiaries when a person passes away, through the deceased person’s deceased estate. Short course content (self-paced) Exemptions from donations tax OUTCOMES OF TOPIC After studying this introduction to donations made and donations tax, you should be able to: Understand what a “donation” is. Understand what a “deemed donation” is. Understand the tax consequences when a donation is made. Understand how property donated will be valued for donations tax purposes. Understand what donations tax is and at what rate it is levied. Identify donations that are exempt from donations tax. Understand that donations will not necessarily have donations tax consequences only, but all other tax consequences should also be considered when donating.

Overview When a taxpayer donates an asset, the obvious tax consequence to consider is donations tax that could arise on the donation. However, a donation of an asset could give rise to a variety of other normal income tax consequences for the dono r and/or done. Many taxpayers make decisions based on the tax implications of the options available to them. If they do not identify all the relevant tax consequences, their decision will not be based on accurate information, and they might be out-of-pocket due to unforeseen tax consequences arising. Similarly, if a taxpayer receives an asset from another taxpayer, it is important that the taxpayer understand all the tax consequences that result from the donation received. Donations tax is levied on the transfer of wealth during the life of a person whereas estate duty is levied on the transfer of wealth to beneficiaries when a person passes away, through the deceased person’s deceased estate. Short course content (self-paced) Calculation of donations tax and liability for donations tax value of donations OUTCOMES OF TOPIC After studying this introduction to donations made and donations tax, you should be able to: Understand what a “donation” is. Understand what a “deemed donation” is. Understand the tax consequences when a donation is made. Understand how property donated will be valued for donations tax purposes. Understand what donations tax is and at what rate it is levied. Identify donations that are exempt from donations tax. Understand that donations will not necessarily have donations tax consequences only, but all other tax consequences should also be considered when donating.

OUTCOMES OF TOPIC After studying this topic related to donations tax you should be able to: ✓ Understand what donations tax is; ✓ Understand what a donation and a deemed donation is; ✓ Understand the meaning of a don or and donee; ✓ Identify gratuitous disposals; ✓ Understand that donations tax is a separate tax; ✓ Understand that donations made should be declared to SARS on an IT144 form and donations received should be declared on the ITR12 tax return.