|
Debbie says: 1 February 2017 at 9:36 If I make money selling my book (I pay my normal tax on the income) and then want to give cash gifts of R50 000 each to 6 of my friends who need the financial help, do they have to pay tax on the received amount or do I have to pay extra tax on the money I give away? |
|
TaxTim says: 1 February 2017 at 9:55 The gifts will be subject to donations tax which is a tax in the hands of the donor (ie you) and not the recipient. However, individuals obtain an annual R100,000 exemption per year and then tax is levied at 20% on the amount above R100,000.Therefore if you donate R300,000 all in the same tax year, R100,000 will be exempt from donations tax and you will need to pay donations tax on 20% X R200,000 = R40,000. You could consider donating half now and half in the next tax year (from 1 March) so as to benefit from the R100,000 exemption twice. You would then only need to apply donations tax on R100,000. Read our blog on Donations Tax for further clarification. |
Do Your Tax Return Easily