Donations tax at 20% or 25% on gifts above the annual exemption.
Donations tax
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Taxable donation
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Net to recipient
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Your breakdown
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Why South Africa taxes the gift, not the receiver
Donations tax catches you out because most people assume the person receiving a gift pays the tax. They do not. Donations tax falls on the donor, the person making the gift, and it exists mainly to stop wealthy individuals from giving everything away before death to dodge estate duty. The two taxes are deliberately twins. Estate duty taxes what you leave behind at death, and donations tax taxes what you hand over while alive, so that the route you choose does not change the bill by much. This tool models a single donor making gifts in one tax year and tells you what SARS, the South African Revenue Service, will expect.
The annual exemption that wipes out small gifts
Every individual can give away a set amount each tax year with no donations tax at all. The figure this calculator applies is R100,000 per year, so a parent helping a child with a deposit, or someone funding a relative's studies, can usually do so tax-free if the total stays under that line. Spend R100,000 helping family and the donations tax is zero. The exemption resets each tax year on 1 March, which is the practical lever most families use: a R300,000 gift split as R100,000 across three tax years escapes the tax entirely, where the same R300,000 in one year would be taxed on R200,000 of it. Two other exclusions matter and are not in the input fields here. Donations between spouses are fully exempt with no ceiling, and gifts to registered public benefit organisations are exempt too. Confirm the current exemption figure with SARS, because the rand amount is the kind of number that gets adjusted.
A R1.5 million gift, step by step
Say you give R1,500,000 to an adult child in one tax year with no earlier donations recorded. The calculator subtracts the R100,000 annual exemption to leave R1,400,000 taxable. Because your lifetime cumulative donations are well below the R30 million mark where the rate steps up, the whole taxable amount sits in the lower band. Using the rates this calculator applies, that is 20 percent of R1,400,000, which is R280,000. The child still receives the full R1,500,000. The R280,000 is your liability as the donor, payable to SARS by the end of the month following the month of the gift.
When the rate climbs to 25 percent
The calculator tracks cumulative donations because the rate is not flat across a lifetime. The rate this tool applies is 20 percent on cumulative donations up to R30 million and 25 percent on everything above that running total. The "cumulative prior donations" field is where you enter what you have already given since the cumulative count began, so the tool can work out how much of your current gift still fits inside the 20 percent band and how much spills into 25 percent. For almost everyone the 25 percent band never bites, but if you are doing serious wealth transfer it changes the maths, and you should treat the R30 million threshold as the calculator's assumption to confirm with SARS rather than a number frozen in stone.
Who should run this
This is for anyone making a substantial gift: a property signed over to a child, a cash lump sum to help a sibling, or shares moved into a family trust. A common mistake is treating a loan to a trust as a gift. It is not, although an interest-free loan can trigger a deemed donation on the interest you forgo, which is a separate calculation worth getting advice on. The honest tip is to plan gifts across tax years and to remember the spouse exemption, because splitting a large transfer between two spouses doubles the annual exemptions in play. None of this is advice on your specific affairs, and the rates and thresholds here are the calculator's working assumptions, so verify the live figures with SARS before you commit.
Do I pay donations tax on money I send my parents every month?
Regular support payments to a parent you are genuinely maintaining are generally treated as bona fide maintenance rather than donations, so they usually fall outside donations tax. A one-off large transfer is different and counts toward your annual exemption. If the monthly help is modest and clearly for living costs, it is normally fine, but document the purpose and confirm the treatment with SARS if the amounts are large.
What happens if I forget to declare and pay?
Donations tax is due by the end of the month after the month in which the donation takes effect, declared on form IT144. Miss it and SARS can charge interest and penalties on the late amount, and the donor stays liable. If the donor does not pay, the receiver can become jointly liable, so a late or ignored declaration does not simply disappear. File and pay on time even when the gift was informal.