Page 281 - SAIT Compendium 2016 Volume1

s 55 INCOME TAX ACT 58 OF 1962 s 56
[De nition of ‘fair market value’ amended by s. 25 (b) of Act 90 of 1988 and substituted by s. 6 (1) (a) of Act 32 of 2005.]
‘property’ means any right in or to property movable or immovable, corporeal or incorporeal, wheresoever situated.
(2) . . .
[Sub-s. (2) amended by s. 22 of Act 28 of 1997 and by s. 37 of Act 30 of 2000 and deleted by s. 6 (1) (b) of Act 32 of 2005.]
(3) For the purposes of this Part a donation shall be deemed to take effect upon the date upon which all the legal formalities for a valid donation have been complied with.
56 Exemptions
(1) Donations tax shall not be payable in respect of the value of any property which is disposed of under a donation—
(h) by or to any person (including any sphere of government) referred to in section 10 (1) (a), (cA), (cE), (cN), (cO), (cQ), (d) or (e);
[Para. (h) substituted by s. 67 (1) of Act 43 of 2014 – date of commencement: 1 March 2015; this substitution applies iro donations made on or after that date.]
(a)
to or for the bene t of the spouse of the donor under a duly registered antenuptial or post-nuptial contract or under a notarial contract entered into as contemplated in section 21 of the Matrimonial Property Act, 1984 (Act 88 of 1984);
[Para. (a) amended by s. 18 (a) of Act 90 of 1964 and substituted by s. 18 (1) of Act 96 of 1985.]
(b) to or for the bene t of the spouse of the donor who is not separated from him under a judicial order or notarial deed of separation;
[Para. (b) amended by s. 18 (b) of Act 90 of 1964.]
(c) as a donatio mortis causa;
(d) in terms of which the donee will not obtain any
bene t thereunder until the death of the donor;
(e) which is cancelled within six months from the date
upon which it took effect;
(f) made by or to or for the bene t of any traditional
council, traditional community or any tribe referred
to in section (10) (1) (t) (vii);
[Para. (f) deleted by s. 32 (1) (a) of Act 113 of 1993 and
inserted by s. 38 (1) (a) of Act 8 of 2007.]
(g) if such property consists of any right in property situated outside the Republic and was acquired by the
donor—
(i) before the donor became a resident of the
Republic for the rst time; or
[Sub-para. (i) amended by s. 38 (a) of Act 85 of 1974 and substituted by s. 41 of Act 59 of 2000.]
(ii) by inheritance from a person who at the date of his death was not ordinarily resident in the Republic or by a donation if at the date of the donation the donor was a person (other than a company) not ordinarily resident in the Republic; or
[Sub-para. (ii) substituted by s. 21 of Act 113 of 1977.]
(iii) out of funds derived by him from the disposal of any property referred to in subparagraph (i) or (ii) or, if the donor disposed of such lastmentioned property and replaced it successively-with other properties (all situated outside the Republic and acquired by the donor out of funds derived by him from the disposal of any of the said properties), out of funds derived by him from the disposal of, or from revenue from any of those properties; or
(iv) and (v) . . .
[Sub-paras. (iv) and (v) deleted by s. 45 (1) (a) of Act 31 of 2005.]
[Para. (g) substituted by s. 18 (c) of Act 90 of 1964.]
(gA) . . .
[Para. (gA) inserted by s. 33 of Act 89 of 1969 and deleted
[Para. (k) substituted by s. 28 of Act 121 of 1984 and by s. 45 (1) (b) of Act 31 of 2005.]
(l) if such property is disposed of under and in pursuance of any trust;
(m) if such property consists of a right (other than a duciary, usufructuary or other like interest) to the use or occupation of property used for farming purposes, for no consideration or for a consideration which is not an adequate consideration, and the donee is a child of the donor;
(n) on or after the seventeenth day of August, 1966, by any company which is recognized as a public company in terms of section 38;
[Para. (n) added by s. 25 (1) of Act 55 of 1966.]
(o) where such property consists of the full ownership in
immovable property, if—
(i) such immovable property was acquired by any
bene ciary entitled to any grant or services in terms of the Land Reform Programme, as contemplated in the White Paper on South African Land Policy, 1997; and
(ii) the Minister of Land Affairs or a person designated by him has, on such terms and conditions as such Minister may in consultation with the Commissioner prescribe, approved the particular project in terms of which such immovable property is so acquired;
[Para. (o) inserted by s. 38 (c) of Act 85 of 1974, deleted by s. 4 (1) of Act 30 of 1984 and added by s. 39 (1) of Act 30 of 1998.]
(p) . . .
[Para. (p) added by s. 31 (1) (a) of Act 94 of 1983 and
deleted by s. 18 (1) (a) of Act 36 of 1996.]
(q) . . .
[Para. (q) added by s. 45 (1) of Act 60 of 2001 and deleted
by s. 26 (a) of Act 90 of 1988.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
(i) (j) (k)
. . .
[Para. (i) amended by s. 26 (b) of Act 90 of 1988 and deleted by s. 38 (1) (b) of Act 30 of 2000.]
. . .
[Para. (j) amended by s. 26 (c) of Act 90 of 1988 and deleted by s. 38 (1) (b) of Act 30 of 2000.]
as a voluntary award—
(i) the value of which is required to be included
in the gross income of the donee in terms of paragraph (c), (d) or (i) of the de nition of ‘gross income’ in section 1; or
(ii) the gain in respect of which must be included in the income of the donee in terms of section 8A, 8B or 8C;
(r)
by s. 35 (a) of Act 74 of 2002.]
by a company to any other company that is a resident
and is a member of the same group of companies as the company making that donation.
[Para. (r) added by s. 35 (b) of Act 74 of 2002 and
substituted by s. 56 (1) of Act 45 of 2003 and by s. 38 (1) of Act 32 of 2004.]
(2) Donations tax shall not be payable in respect of— (a) so much of the sum of the values of all casual gifts made by a donor other than a natural person during any year of assessment as does not exceed R10 000: Provided that where the year of assessment exceeds or is less than 12 months, the amount in respect of which the tax shall not be payable in terms of this
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