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Jeremy says: 23 May 2016 at 16:29 I loaned my parents money to purchase a vehicle in December last year. As my mum was going to be the primary driver, it was registered in her name. It was agreed though that my dad would repay the loan at some point in the future when they dispose of their current property. This was obviously an informal agreement but I am concerned that SARS will see this as a "donation" rather than a loan. Is there anything I can do to prevent this from being viewed as a "donation" and having to pay donation tax? Is transferring ownership of the car to myself an option I should consider until loan is paid? |
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TaxTim says: 24 May 2016 at 9:10 How much was the loan for and are you parents financially dependent on you? |
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Jeremy says: 24 May 2016 at 11:41 The loan was for R200 000. They are not financially dependent on me. |
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TaxTim says: 24 May 2016 at 15:30 You are able to donate R100 000 per tax year so you could have donated them R100 000 last December and then written off the rest of the loan in the current tax year without any donations tax issues. |
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Jeremy says: 24 May 2016 at 16:12 Thank you for your response. I paid the dealer the entire amount directly for the vehicle in December. Are there any other options to consider? |
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TaxTim says: 25 May 2016 at 17:44 You still are essentially loaning your parents the value so you can still make use of the above suggestion. |
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Jeremy says: 30 May 2016 at 9:43 Thanks! |
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TaxTim says: 30 May 2016 at 15:27 Only a pleasure! |
