Donations Tax and Estate Duty in South Africa (2026/27): R150,000 and R3.5 Million Explained
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Short answer: from 2026/27 you can give away R150,000 a year free of donations tax (up from R100,000). Above that, donations tax is 20% up to R30 million and 25% after that. When you die, estate duty is 20% (25% above R30 million) on your estate's value after deductions and a R3.5 million abatement. Donations to a spouse are exempt, but Budget 2026 limits that to spouses who are South African residents (National Treasury Budget 2026 tax guide; Moonstone).
General information, not tax or legal advice. Estate planning involves wills, trusts and CGT as well. Speak to a fiduciary specialist or registered tax practitioner before making large donations.
Donations tax at a glance
| 2026/27 | |
|---|---|
| Tax-free donations per tax year (individuals) | R150,000 (was R100,000) |
| Casual gifts by companies and trusts | Up to R20,000 a year (was R10,000) |
| Rate on donations up to R30 million (cumulative since 1 March 2018) | 20% |
| Rate above R30 million | 25% |
| Who pays | The donor |
Sources: Treasury tax guide; SARS donations tax.
What counts as a donation? SARS says it's "any complimentary disposal of property, including any free waiver or giving up of a right" (SARS).
What's exempt from donations tax
SARS lists exemptions including donations to (SARS):
- Your spouse. From Budget day, 25 February 2026, this only applies if your spouse is a South African resident (Moonstone).
- Approved public benefit organisations (within limits)
- Any sphere of government
- Donations cancelled within six months of taking effect
Plus the R150,000 annual exemption for individuals. It doesn't carry over if you don't use it.
Worked example: donations tax
Thabo gives his daughter R250,000 towards a house deposit in the 2026/27 tax year, and makes no other donations.
- Exempt: R150,000
- Taxable: R100,000 × 20% = R20,000 donations tax
He could avoid this by spreading the gift over two tax years, for example R150,000 before 28 February 2027 and R100,000 after 1 March 2027. We calculated this with the 2026/27 rules.
How to pay donations tax
- The donor completes the IT144 declaration and pays the tax.
- If the donor doesn't pay on time, the donor and the person receiving the donation become jointly liable (SARS).
- A donation of an asset (not cash) can also trigger capital gains tax for the donor. See our CGT guide.
Estate duty at a glance
According to SARS and the Treasury tax guide:
- Who it applies to: the worldwide property of people ordinarily resident in South Africa, and the South African property of non-residents.
- Deductions: liabilities, bequests to public benefit organisations, and property left to a surviving spouse (section 4 of the Estate Duty Act).
- Abatement: R3.5 million off the net value of the estate.
- Rate: 20% on the first R30 million of the dutiable value and 25% above that.
Worked example: estate duty
A single person dies with a net estate (after liabilities) of R5 million and no bequests to a spouse or charity.
- Dutiable value: R5,000,000 − R3,500,000 = R1,500,000
- Estate duty: R1,500,000 × 20% = R300,000
If everything is left to a surviving spouse, the spouse deduction usually means no estate duty on the first death. We calculated this example with the published rates.
Don't forget the other taxes at death
- CGT: death is a disposal for CGT purposes (SARS also explains how CGT works on an inheritance on its CGT page), but the annual exclusion rises to R440,000 in the year of death (Treasury tax guide).
- Retirement funds: retirement annuity and pension fund benefits are generally paid to beneficiaries under the fund's rules, not through your will. Keep your beneficiary nominations up to date. See our retirement lump sum tax guide.
FAQ
How much can I donate tax-free in South Africa in 2026/27?
R150,000 per tax year as an individual, up from R100,000. Donations to a resident spouse and approved public benefit organisations are also exempt.
What is the donations tax rate?
20% on cumulative donations up to R30 million since 1 March 2018, and 25% above that.
Who pays donations tax?
The donor, using the IT144 declaration. If the donor doesn't pay, the recipient can also be held liable.
What is the estate duty abatement?
R3.5 million, deducted from the net value of the estate before estate duty is calculated.
Is there estate duty on property left to my spouse?
Property left to a surviving spouse is a deduction under section 4 of the Estate Duty Act, so it generally isn't subject to estate duty.
Sources
Pages we used for this article, checked on or before the update date above.
- National Treasury Budget 2026 tax guide · treasury.gov.za
- Moonstone · moonstone.co.za
- SARS donations tax · sars.gov.za
- SARS · sars.gov.za
- CGT page · sars.gov.za
Changelog: 16 Oct 2026, first published with the Budget 2026 donations exemption.