Non-profit organisations such as Universities, welfare organisations and religious organisations among others, rely on the generosity of the public and other organisations to fund their activities. In recognition of this, the South African Government encourages giving by providing a tax deduction for certain donations made by taxpayers.
Many individuals and businesses are not aware that their donations qualify for tax relief. In terms of Section 18A, a tax certificate acknowledging a donation can be given to a donor by an organisation performing public benefit activities (PBA’s). Public benefit activities performed by the University of KwaZulu-Natal include welfare; health care; education and development; and conservation, environment and animal welfare.
Section 18A public benefit activities are those activities that allow you the donor, to claim your contribution as a tax write-off from your taxable income in a given financial year. The UKZN Foundation will issue you with a section 18A tax certificate which allows you to claim your donations. SARS makes the final determination regarding tax deductions.
Deduction limited to 10%
The tax claim is limited to 10% of your taxable income. Donations in excess of 10% of your taxable income will be carried forward to the 2020 financial year and can be claimed in that year. Although given in the 2019 financial year, the rolled over amount will be deemed to be transferred in the 2020 financial year.
Donations in cash or property-in-kind
Your donations to the UKZN Foundation can be either in the form of cash or property-in-kind. Examples of property-in-kind donations that can be made to the Foundation:
- Trading stock, for example, a motor car dealer can donate a motor vehicle or a stock broker can donate financial instruments to the UKZN Foundation. The donor would claim the lower of cost or fair market value of the stock or financial instruments as a tax write-off.
- Other trading assets; for example, a company can donate usable assets to the Foundation. In this case the write off would be the lower of the depreciated value or the fair market value of the asset.
- Immovable property that is purchased, manufactured, erected, assembled or constructed by the donor can be donated to the Foundation. Here, the lower of cost or fair market value of the property can be claimed by the donor as a tax write-off.
No Section 18A Tax Certificates for services rendered
The Foundation cannot issue Section 18A tax certificates in respect of pro-bono services rendered by the donor.
To save on income tax in this financial year, your donation has to be transferred to the UKZN Foundation on or before 28 February 2019. Support the UKZN Foundation while maximising your tax savings.
Donate to UKZN Foundation and Max your Tax.
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