As you are no doubt aware SARS charges tax on any donation which a person makes to another person if the amount donated exceeds R100 000-00 in any tax year. This donations tax is currently running at 20%.
I recently did some research for a client who was about to receive a substantial donation (a half share in a house worth more than R2 million) from her life partner. He was a foreigner and he had no rights of residence here in South Africa.
What I established was that if a South African resident receives a donation from a foreign source, the whole of the donation is completely tax-free. Neither the donor nor the donee are liable for any tax here in South Africa. This worked out very well for my client.
This also provides an interesting loophole for foreigners who intend to settle here in this country. If they wish to divest themselves of assets for estate duty purposes here in SA, just before they arrive, they can establish a South African company or a South African trust and donate a substantial portion of their estate to the company or the trust. Such a donation will have no tax implications here in South Africa.
Kindly note that this information is true at the time of writing. Our tax laws do however change quite often. If you intend to rely on this advice, kindly protect yourself and obtain confirmation that this exemption has not been abolished.