As your financial advisers, we can help you design a giving plan that aligns with your charitable values and your tax strategy. Done right, generosity can deliver two wins at once.
Why tax-efficient giving makes so much sense
South Africa’s tax system rewards donations to approved Public Benefit Organisations (PBOs). These donations can be deducted from taxable income under Section 18A of the Income Tax Act. This means your giving can reduce your tax bill while supporting causes you care about.
You may deduct up to 10% of taxable income each year (including taxable capital gains, but excluding lump‑sum retirement or severance benefits). If you donate more than the 10% cap, the excess can be rolled forward to future years.
What’s new in 2026
SARS has announced stricter rules for 18A recipients from 1 March 2026. To benefit from your deduction, your receipt will need to include:
- Donor details: full name, nature of donor (individual, company, trust), ID type and country of issue (for individuals), or registration number (for companies/trusts).
- Tax reference number, contact number and email address of the recipient.
- A unique receipt number for every donation.
- For donations in kind: a clear description of the property donated and its fair market value.
Without these details, SARS may disallow the deduction. PBOs must also submit IT3(d) reports, meaning your donation claims will be cross-checked against the PBO’s filings.
Practical steps for donors
These are the practical steps for you to follow. Alternatively, we can help with the nitty gritty.
- Verify approval: Always confirm the organisation is a SARS-approved Section 18A PBO. Ask for their approval number before donating.
- Plan around the 10% cap: Estimate your taxable income early and structure donations accordingly.
- Consider gifts in kind: Shares, property, or other assets can be donated if properly valued. This can often help you to avoid capital gains tax while still qualifying for the deduction.
- Time your giving: Donations made before the end of February count for that tax year. Strategic timing can maximise savings.
- Keep compliant receipts: Ensure every receipt meets the 2026 requirements. Store them securely for at least five years.
Aligning generosity with strategy
In 2026 it’s imperative to make the most of your charitable donations by following SARS’ rules. This will help you have the most social impact while keeping your money safe. Giving can be more than just a nice thing to do when you have the proper structure in place. It can also be a smart financial move that helps you and the causes you support.
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Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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