Page 33 - Bespoke EPG 2017 Digital

■■ Donations between spouses married in community of property
◆◆ If one spouse in a marriage in community of property makes a donation
to the other of property that forms part of the joint estate of the spouses,
it is deemed that the donation is made in equal shares by each spouse.

■■ Donating a usufruct
◆◆ The estate planner could donate an asset in the form of a split donation
of the usufruct and bare dominium.
◆◆ Donations tax may be payable, however no subsequent estate duty is
payable thereon.
◆◆ The way the usufruct and the bare dominium is valued for donation’s tax
purposes may be beneficial to the estate planner.

■■ Record the donation in an agreement and include in income tax return
◆◆ It is advisable to record the donation in an agreement, although it is not
a legal requirement that the donation be in writing (unless it is in regard
to immovable property or for donations promised for a date in the future,
known as “executory” donations).
◆◆ Both the donor and the donee should record the donation in their income
tax return in the year that the donation was made.
◆◆ Should donations tax be payable on a donation, the donor is responsible
for the payment, provided that should the donor fail to make payment
within the required timeframe, both the donor and donee are jointly and
severally liable.

■■ Tax avoidance schemes- Section 7 of the Income Tax Act
◆◆ Section 7 was inserted into the tax legislation many years ago to tackle
specific tax avoidance schemes.
◆◆ Section 7 specifically targets assets which are donated by a taxpayer
person to another person with the idea of avoiding tax in his own hands
on the profits derived from these assets.

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