PRACTICAL EXAM TYPE QUESTIONS FOR LEARNING UNIT 16 – DONATIONS TAX

QUESTION 16.1 (16 marks, 29 minutes)

Jake Black is a South African resident. He was born on 19 August 1950. He made the following
donations during the 2025 year of assessment:

1. On 1 March 2024 he gave his wife, Jessie, the family residence, which had originally cost
R75 000 in 1970 when Jake bought the house. This house was valued at R890 000 on
1 March 2024.

2. On the same day, he also donated his farm in Botswana to a friend, Blacky White. On
1 March 2024, this farm had a market value of R500 000. Jake inherited this farm from his late
father on 1 March 2002. His father had been a resident of Botswana all his life.

3. He waived a debt owed to him by his cousin, John Smith, a full-time university student, to whom
he had lent R12 000 on 1 May 2023, at an interest rate of 8% per annum. The capital and the
interest due were repayable to Jake on 1 May 2024, the date he waived the loan.

4. On 1 August 2024, he gave 20 000 shares in Rugby Ltd to his younger daughter, Vincie Black.
On 1 August 2024, a Rugby Ltd share had a market value of R8. Jake Black paid R100 000 for
these shares in Rugby Ltd.

5. On 1 December 2024, he gave Gary, a younger brother (who was then 35 years old) a usufruct
on two-thirds of a commercial building Jake would own for the remainder of Gary’s life. On the
same day, he donated to Bakkies, a nephew (who was then 16 years old), the two-thirds share
in the commercial building, subject to Gary’s usufruct. On 30 November 2024, an independent
third party valued the commercial building at R1 200 000.

6. On 15 January 2025, Jake Black won R65 000 000 in a lottery. On 31 January 2025 he donated
R30 000 000 to his only grandchild, Pearl Black, the daughter of his pre-deceased son.

7. On 1 February 2025, he donated R25 000 to Unisa. The university used the donation to subsidize
the salary they were paying to one of the professors in its Department of Taxation. Unisa qualifies
as a public benefit organization.

The dates of birth of the Black family are as follows:

Jessie Black – 16 August 1952

You may assume that Jake did not make any other donations since 1 March 2024.

REQUIRED: MARKS

Using the following table, calculate the total donations tax payable by Jake Black as a
result of the donations he made during the period 1 March 2024 to 28 February 2025: 16

Date Donation Amount Exemptions Taxable Tax @ Reason

Sino Dlamini (Sino) is a 45-year-old South African resident who is married out of community of
property to Vincent Dlamini (Vincent). Sino is an independent wealthy woman with lot of assets, she
is a qualified chartered accountant in South Africa. The following are the donations she made in
2025 year of assessment:

1. On 2 March Sino donated a personal laptop with the market value of R15 000 to her youngest
daughter (Mincili Dlamini).
2. On 15 March Sino donated a motorbike valued at R60 000 to her ex-husband’s brother.
3. On 29 March 2024 Sino donated R150 000 to Economic Freedom Fighters (EFF).
4. On 10 April 2024 Sino donated a usufruct valued at R400 000 to Vincent her husband in a
property with the total value of R2 500 000 and the bare dominium to her elder son (Mzizi
Dlamini).
5. On 30 April 2024 Sino waived a debt owed to her by her niece, this debt came because of
Sino lending her niece R15 000 at a market interest rate of 8% per annum on 1 May 2023.
This was the original amount, and no interest or capital has been repaid.
6. On 30 September 2024 Sino gave her maid R50 000 over and above the salary as an
appreciation for the good work the maid is doing.
7. On 15 January 2025 she gave R70 000 to her middle son (Andile Dlamini) so he can be able
to pay for school tuitions fees, accommodation, and food at the University as her middle son
is a Bcom Accounting final year student.
8. On 15 February 2025 Sino sold her motorbike valued R85 000 to her grandfather in law for
R25 000.
9. Sino Dlamini donated a property of R3 500 000 to her ex-boyfriend with the intention of
winning him back and she insisted that it should not be included in her donations tax
calculation as she did not declare it in her tax return.

REQUIRED: MARKS
A Discuss the impact of the above transactions on the donations tax liability of
Sino Dlamini in the 2025 year of assessment. Include calculations and you
should also show the total donations tax payable by Sino Dlamini. 22
B With reference to transaction 9 discuss all the ethical concerns you have about
Sino Dlamini’s non-declaration of donation to her ex-boyfriend 3
QUESTION 16.3 3 marks (5 minutes)

Thabisa Zizi (“Thabisa”) is a 29-year-old South African resident. Thabisa owned a 12-meter boat
which she purchased for R200 000 in 2015. On 15 November 2024, she decided to donate it to her
friend when the market value was R285 000. This is the only donation Thabisa made during the
2025 year of assessment.

REQUIRED: MARKS

Calculate Thabisa’s donations tax liability in the 2025 year of assessment

QUESTION 16.4 10 Marks (18 minutes)

Sarah Baartman (Sarah) is a 49-year-old South African resident. She is unmarried and has no
children. Sarah bought a holiday home in Cape Town in 2019 for R2 910 000, this is after she paid
a property valuator R100 000 who valued the house on its acquisition to ensure she is not
significantly paying more than the market value of the property on that date. In 2020 Sarah
refurbished the house by adding an extra lounge for R450 000. On 10 March 2024, the ceiling in
one of the bedrooms was damaged by heavy rains and she incurred R15 000 to fix it. On 15
December 2024, Sarah decided to donate this holiday home to her newly found boyfriend, a teacher
in Cape Town, when its market value was R5 500 000. Donation’s tax was paid by Sarah. This is
the only asset that Sarah donated in the year 2025 of assessment. Below is a tax calculation that
was done by Sarah’s niece who is currently doing final year Bcom Accounting:

Proceeds received R5 500 000

Less: Base cost: (R3 375 000)

Capital gain R2 125 000

REQUIRED: MARKS
Critically review (with calculations where relevant) the tax calculation performed by
Sarah Baartman’s niece on the donation of the holiday home in Cape Town.
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