Insights

TAX NEWSFLASH – Donations Tax

by | Mar 12, 2026 | Advisory Services

TAX NEWSFLASH – Section 7C – Donations Tax Deadline Approaching (31 March 2026)

A reminder to all clients with low interest or interest free loans to trusts.

Section 7C of the Income Tax Act requires that the deemed donation arising from low or interest-free loan arrangements be calculated annually. Where a donations tax liability arises, payment must be made to SARS no later than 31 March 2026.

What we need to do:

  • Review all loan accounts to trusts or trust owned companies for the 2025/2026 year of assessment.
  • Calculate the Section 7C deemed donation (typically the difference between interest charged and the SARS official rate).
  • Submit and pay the corresponding donations tax by 31 March 2026 to avoid interest.

Our team can help you:

  • Determine whether Section 7C applies to you.
  • Calculate the deemed donation.
  • Prepare the IT144 declaration.
  • Consider structuring opportunities to reduce future Section 7C exposure.

Please contact us if you require assistance before deadline:

michellet@sentineltrust.co.za | jacoriu@sentineltrust.co.za |  janinel@sentineltrust.co.za