Tax deductibility

For South African taxpayers: You may claim up to 10% of your income1 in a given tax year from SARS as a charitable donation. To do this, you simply specify the Foundation’s PBO number on your tax return: 930052029. You will be issued a Section 18A tax certificate once we receive your donation – please make sure that we have your up-to-date details for this purpose (you can update your details when making your donation).

1 The donation deduction is available to all tax payers (individuals, trusts and companies) in South Africa. The deduction calculation is based on taxable income including the taxable portion of any capital gains, but excluding taxable income from any retirement fund lump sum benefit / withdrawal benefit and severance benefit. Donations in excess of 10% of annual taxable income may be carried forward and treated as a donation in the next year.

Preferential tax treatment is granted to organisations established for the benefit of the general public, which have been approved by the Tax Exempt Unit as Public Benefit Organisations (“PBOs”) – such as the GSB Foundation. The main tax benefits available to PBOs are that they are fully exempt from paying income tax if they carry on no or limited trading activities. PBOs are also exempted from the payment of capital gains tax when disposing of an asset, provided that the asset was not used to carry on business or trading activities. Approved PBOs are also exempt from the payment of transfer duty when acquiring immovable property, provided the property is used solely or substantially to carry on public benefit activities. PBOs are also exempt from donations tax and dividends tax. Individuals can make donations to PBOs without paying donations tax or capital gains tax.  

For taxpayers registered outside SA: Tax-efficient donations to the GSB Foundation are not currently possible for taxpayers registered outside South Africa. However, there are still options for you to support the cause. You can A) make direct donations to the Foundation without tax benefits or B) donate directly to the Graduate School of Business through the UCT Alumni Relations International Offices located in Australia, Canada, UK and USA. By choosing this latter option, you can enjoy applicable deductions and specify how you want the funds to be used, such as for scholarships, faculty, research or facilities.

Donating shares

If an individual donates shares to a PBO which are standing at a gain, no capital gains tax or donations tax will be payable by the donor as a result of the donation. Neither will the PBO pay any securities transfer tax on the receipt of the shares. Once the shares are owned by the PBO, no dividends withholding tax (at 15%) will be due. If the PBO subsequently decides to sell the shares, it can do so without paying any capital gains tax. If individuals make a bequest to a PBO in their Will, the bequest will be exempt from estate duty. In short, donating shares or unit trusts, which are standing at a gain, is a very tax efficient way of funding a PBO.

Property in kind

A taxpayer can claim a deduction for a donation of certain property in kind to section 18A approved organisations, such as shares. There are specific valuation rules which apply to determine the amount of the deduction for donations of property in kind – please contact us to discuss this option.