“Street Notes” – December 2020

Quote of the Month

“I’ve learnt that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

– Maya Angelou



Following an extremely volatile October, where global markets were rocked by US election uncertainty and signs of Covid rearing its ugly head again in Europe & the US, November was filled with much more promise. First, we had the “Biden Bounce” where markets breathed a sigh of relief when it became obvious that Joe Biden had defeated Trump in an extremely ugly election (despite Trump’s threats of legal action). A Biden win should see further stimulus coming to the US economy, probably in January, and with Biden at the helm it looks like we are seeing a more “risk on” scenario than “risk off” playing out. The Biden presidency could also be a reason to celebrate for emerging markets like our own. At least Biden will know where South Africa is, seeing that his daughter in-law hails from Joburg! The second bit of good news to move markets came when news broke that the vaccine developed by Pfizer & BioNTech was more that 90% effective in preventing Covid-19 infections. The first tranche of vaccines seems imminent.

So, with this backdrop, markets rallied in November. In ZAR, the best returns came from SA property (17.43%) and SA Equity (10.51%). Global equities in Rands lifted by 7.02% over the last month, while SA Bonds grew by 3.25%. On the negative side, during the month Fitch downgraded South Africa’s long-term foreign and local currency ratings further to BB – and Moody’s downgraded South Africa’s long-term foreign and local currency debt ratings. Both agencies maintain a negative outlook. Bond markets showed little response though as the risk of a government debt default seems already to be priced into the markets. The Rand was also unaffected by this news especially against a weaker US Dollar, with our currency rallying by 4.75% over the month bringing the 6-month appreciation of the Rand Vs the $ to 12.21%. The Rand is the emerging markets 2nd best performer against the US$ over the last quarter.

Return on Life

Money is a means to an end. It is a material substance with a spiritual potential for fulfilling purpose. We must first discover and clarify our meaning and purpose and then the we will know with certainty the direction our money must take.

 I’ve often told retirees that the two things you need to retire well are enough purpose to wake up in the morning and enough money to sleep at night. But don’t think for a minute that having the money will give you a purpose. Money can fund a purpose but it cannot find a purpose. The purpose must pre-exist. This is where so many people miss the great fruitfulness of the latter third of their lives: not having a clear sense of how they want to contribute to the world around them. A life of leisure and ease will not satisfy this need. It’s not consuming that lends meaning to our lives but contributing.

Pic of the month 

Tip of the Month – Dealing with Donations

What is a donation?

A donation is any gratuitous (free or at no charge) disposal of property including any gratuitous waiver or renunciation of a right.  If the person (donee) receiving the donation gives anything in return, then it is not a donation.

A donation takes effect when all legal formalities for a valid donation have been complied with (section 55(3)).

Donations tax rate

Donations tax is set at a flat rate of 20% for amounts donated above R100 000 during the tax year and at a rate of 25% for any donations exceeding R30 million.


There are four (4) categories of exemptions –

  • Category one – Certain donations are completely exempt from donations tax.  For example, a donation made to a spouse; an approved public benefit organisation; any sphere of government; that is cancelled within six (6) months from the date that it took effect; etc (section 56(1)).
  • Category two – In the case of a donor who is not a natural person (for example, companies and trusts), the exemption is limited to casual gifts not exceeding R10,000 per year of assessment (section 56(2)(a)).
  • Category three – The first R100,000 of property donated in each year of assessment by a natural person is exempt from donations tax (section 56(2)(b)).The first R100,000 of property donated in each year of assessment by a natural person is exempt from donations tax (section 56(2)(b)).
  • Category four – So much of any bona fide contribution made by the donor towards the maintenance of any person. This exemption is limited to what the Commissioner considers reasonable (section 56(2)(c)).

Who is liable for donations tax?

The person making the donation (donor) is liable for to pay the donations tax, however if the donor fails to pay the tax within the payment period, the donor and donee are jointly and severally liable (section 59).

The Commissioner may at any time raise an assessment on the donor or donee (or both), for the donations tax.  Including, where the Commissioner is satisfied that the full amount of donation tax was not paid, raising an assessment for the difference.  The payment by either the donor or donee will discharge this joint liability (section 60(5)).


If you would like more clarity, please email me directly at [email protected]

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Adam Bacher [email protected]
Leigh-Ann Ritson [email protected]