South Africans with non-resident spouses face major tax change

• The proposed amendment limits the donations tax exemption to donations made by a South African tax resident spouse.
• The change targets arrangements where spouses deliberately stagger their cessation of tax residence to avoid donations and capital gains tax, with the aim of preventing wealth transfer outside the South African tax net.
• Expatriates whose spouses remain resident after they cease being South African tax residents may be directly affected, as they could no longer donate assets free of donations tax under the new rules.