ESTATE DUTY: EXEMPTION

It is hereby confirmed that the value of any property included in an estate which accrues to the above-mentioned organisation will enjoy exemption from estate duty in terms of section 4(h) of the Estate Duty Act, 1955.

Kindly note that the Taxation Laws Amendment Act, 2000, (Act No.30 of 2000) has introduced new provisions regulating the tax-exempt status of public benefit organisations as well as the tax deductibility of donations to such organisations. These provisions came into operation on 15 July 2001.

The Minister has now, by way of a notice in the Government Gazette, No. 22513 dated 27 July 2001 published certain lists of approved public benefit activities (these lists are available on SARS web site: http://www.sars.gov.za). In terms of the new legislation, a public benefit organisation must carry on one or more approved public benefit activity.

In order to qualify for exemption in terms of section 10(1)(cN) of1he Income Tax Act, the public benefit organisation must be approved by the Commissioner and comply with the provisions of section 30 of the Income Tax Act.

All organisations whether or not they have been previously exempted by the Commissioner for the South African Revenue Service must reapply for approval as a public benefit organisation.

Where the founding document of the organisation does not comply with the requirements of section 30, the persons acting in fiduciary capacity, may submit a written undertaking that the public benefit organisation will comply with the provisions of the Act. See form PB02: Written Undertaking

The organisation will be required to amend the founding document within a period of five years to comply with the provisions of section 30. Kindly note that if the organisation does not re-apply on or before 15 July 2002, the exemption from income tax granted in terms of section 10(1)(f) of the Act on 29 May 1997 will no longer be applicable with effect from 15 July 2001.

To enable me to reconsider your application for approval in terms of section 30 of the Act, the attached application form (PBO1) and written undertaking (PBO2) must be completed and returned to this office. <