Donations & Section 7C Trust Tax Compliance
Submit Donations Tax Declaration (IT144)
Declare taxable property, cash donations, or Section 7C interest-free trust loan deemed donations to SARS, apply your R100,000 annual exemption, and file Form IT144 on time.
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eFiling Navigation & Statutory Deadline
IT144 eFiling Path & Section 60 Payment Rule
Due: End of Month Following Donation (31 March for s7C)
eFiling Navigation Path: Log into eFiling → Returns → Request Return → Donations Tax (IT144) → Generate PRN
Verified SARS Portal
Submit Your SARS IT144 Declaration Online
Use official SARS digital query portals to submit donations tax returns and calculate payment reference numbers.
IT144 Filing Guide
How to Submit an IT144 Declaration
01
Access SARS eFiling IT144 or the SOQS Donations Tax Portal
Log into SARS eFiling -> click "Returns > Request Return > Donations Tax (IT144)" or navigate to tools.sars.gov.za/sarsonlinequery/DonationsTax to upload a signed IT144 declaration.
02
Capture Donor & Donee Tax Identification Details
Input the donor’s 10-digit Income Tax Reference Number and SA ID/CIPC registration number, together with the donee’s (recipient’s) full legal details and tax number.
03
Declare Fair Market Value & Effective Date of Donation
Specify the nature of the property (cash, unlisted shares, immovable property, or Section 7C interest-free trust loan foregone interest), its fair market value under Section 62, and the date the donation took effect.
04
Apply Section 56 Exemptions & Compute 20% / 25% Tax
Deduct the R100,000 annual natural-person casual exemption (or R10,000 casual gifts exemption for companies) or Section 56(1)(b) spousal exemption. Multiply net taxable donations by 20% (or 25% where cumulative taxable donations since 1 March 2018 exceed R30 million).
05
Submit IT144 & Pay via PRN Before End of the Following Month
Under Section 60(1) of the Income Tax Act, the IT144 declaration and Donations Tax payment must be submitted to SARS by the end of the month following the month in which the donation took effect.
Audit & Valuation Risks
Common Donations Tax & Section 7C Compliance Pitfalls
Confusing the Old 3-Month Rule with the Current End-of-Next-Month Deadline
Section 60(1) of the Income Tax Act requires Donations Tax to be paid by the end of the month following the month during which a donation takes effect (and on 28/29 February for Section 7C deemed donations)—late payment immediately attracts Section 89quat interest.
Omitted Section 7C Low-Interest / Interest-Free Trust Loans
Where a natural person or connected company lends money to a trust at an interest rate below the SARS Official Rate of Interest (repo rate + 1%), the interest foregone on the last day of February is a deemed annual donation requiring an IT144.
Selling Assets Below Market Value to Connected Persons (Section 58)
Transferring property, vehicles, or shares to family members or a trust for "nominal consideration" (below fair market value) triggers both Donations Tax under Section 58 and Capital Gains Tax under Paragraph 38 on the market-value gap.
Joint Liability of Donor and Donee (Section 59)
If the donor fails to file the IT144 and pay the 20% Donations Tax within the statutory period, SARS holds the donor and the donee (recipient) jointly and severally liable for the unpaid tax.
Frequently Asked Questions
What is the annual Donations Tax exemption in South Africa for 2026?
Under Section 56(2)(b) of the Income Tax Act, natural persons (individuals) may make cumulative non-exempt donations of up to R100,000 per tax year completely free of Donations Tax. Companies and trusts are limited to R10,000 per year for casual gifts. Bona fide donations between spouses and to approved Section 18A Public Benefit Organisations are 100% exempt.
What is the SARS Donations Tax rate and when is it due?
Donations Tax is levied at 20% on cumulative taxable donations up to R30 million, and 25% on the portion exceeding R30 million. Both the IT144 declaration and payment must reach SARS by the end of the month following the month in which the donation took effect.
How does Section 7C affect interest-free loans to family trusts?
Under Section 7C, if you advance an interest-free or low-interest loan to a family trust, the difference between interest charged and the SARS Official Rate of Interest is deemed to be a ongoing donation made on the last day of February each year. You can offset your R100,000 annual individual exemption against this deemed donation, and any excess is taxed at 20% via an IT144 due by 31 March.
How long does SARS take to process an IT144 and issue a PRN?
When submitted on SARS eFiling, the IT144 assessment and 19-digit Payment Reference Number (PRN) are generated immediately. When uploaded via SOQS with supporting valuation documents, processing takes 5 to 10 business days.
Can My Accountant calculate Section 7C trust interest and file IT144 returns?
Yes! We compute annual Section 7C interest-foregone schedules for family trusts, verify Section 56 exemptions, value unlisted shares, and lodge IT144 declarations on eFiling.
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