Can the R100 000 donations exemption apply to a trust?
29 May 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
are currently updating a trust’s books from 2012. We would like to use the R100
000 donation exemption.
do I capture it in the Trust’s books?
it have to flow in cash or can we write a journal?
we go back to 2012? Was the rate the same?
that the exemption that you refer to is available to individuals only. It
is therefore not available to the trust. From the information provided it
appears that the donations may in actual fact not have been made to the
trust. If this assumption is wrong and the individual in actual fact made
a donation to the trust, you will have to obtain detail of the other taxable
donations made by the individual during the relevant year of assessment.
In terms of
section 56(2) it is the first R100 000 of the sum of the values of all property
disposed of under donation by a donor (person) who is a natural person in
respect of which donations tax is not payable.
The R100 000
(in section 56(2)(b)) has not been amended since 2008.
It is unclear
how you want to use the R100 000 donation exemption. In our view it would
be beyond tax avoidance to retrospectively create donations to the trust.
It is also unclear if the donors in the current instance declared the donations
on the IT144 form.
In most instances donations to a trust are by their
nature capital receipts and should be reflected as trust capital.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.