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Tax and handling donation from non SA resident

Posted 9 November 2015 under Tax Questions



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Jean says:
5 November 2015 at 12:23

Dear Tim,
Are there any taxes due in South Africa, if my daughter (non SA resident, living in Australia and having Australian passport) donates money (more than ZAR100K) to her parents, and we do not transfer the money to SA and keep them within a bank outside SA (UK or other place) and in different currency?
1. Do we have to declare such a donation on our tax returns and what are the tax complications here?
2. Do we have to declare this account/amount every year in our tax returns and pay some taxes like capital gain tax as a result of Rand depreciation?
3. Are there any limitations on the amount we can receive?

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TaxTimTaxTim says:
5 November 2015 at 14:57

Donations from non-residents are not taxable in SA, but the earnings from any investments such as interest or dividends etc that this money makes will be taxable in SA. There is a spot on the tax return under the "'Amounts not considered Taxable" question that you can include this donation in.


Jean says:
5 November 2015 at 15:24

Dear Sir,
thank you.

Can we keep the money outside SA in different currency?

Is it possible to give us a short answer to question 2 and 3?

Do we have to calculate every year the amount in Rand and declare capital gain in case of further ZAR depreciation?


TaxTimTaxTim says:
6 November 2015 at 6:42

No, you do not pay capital gains tax on cash currency changes of your investment if you are no trading in cash. There are no limitations and you do not need to declare the amount each year. You only declare the income arising from investing the money somewhere.


Jean says:
7 November 2015 at 13:41

Thank you Tim,
Just last question in regrads to the above:
What proves are needed for SARS in case of gift from NON SA resident children?


TaxTimTaxTim says:
8 November 2015 at 16:50

They would just need to show that the funds were not earned in SA.


Jean says:
9 November 2015 at 17:32

Dear Tim,
Thank you.
How do we prove that funds are not earned in SA?
Our daughter has left SA 15 years ago.
She works and lives in Australia. What proves do we need?
She has investments in Europe and wants to transfer those investments to us.


TaxTimTaxTim says:
9 November 2015 at 22:43

In that event you just need to write a letter stating that she has been out of SA and perhaps show her passport. However it should not come to that.


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