If you intend giving away money legally you have until midnight tomorrow to do so.
Many people don't realise that you cannot give away your money unless it is to a registered charity. Revenue levies a donations tax of 25 percent on any money over R25 000 you give away with the exception of a donation to your wife or husband.
In practice it's very difficult for Revenue to pick up small amounts of money but larger amounts will have to be accounted for, both in your name and in the name of the donee, the person who receives the donation.
Revenue allows you to donate R25 000 a year to your wife or husband without attracting donations tax. Your spouse can then donate R25 000 a year even if he or she is not a registered taxpayer.
This is a neglected estate planning tool and can, if done annually, reduce your estate and the eventual estate duties substantially. Estate duty is payable on R1 million or more at 25 percent.
It is important to realise that this benefit has to be utilised in every tax year; it cannot be carried over into the next tax year.
But how come R100 000? Simple. You donate R25 000 to your husband or wife today and another R25 000 on Monday, the first day of the new tax year. That totals R100 000 assuming your husband or wife does the same.
This money can be invested in many ways. You could donate it to your children, or invest the money on their behalf into unit trusts or an endowment policy.
Most probably the best option is to create a family trust and donate this money on an annual basis to the trust.
If you are worried that you might be donating too much of your money and might need it in time, no need to worry.
The trust, being a discretionary one, can always lend you money. On your death, this loan has to be repaid by your estate to the trust, which reduces or limits the potential death duties on your estate.