Section 54 of the Income Tax Act 58 of 1962 imposes donations tax on the value of any property disposed of under any donation by any resident of South Africa.A ‘donation’is defined in s 55(1) as meaning ‘any gratuitous disposal of property including any gratuitous waiver or renunciation of a right’. Section 58 of the Act extends the meaning of ‘donation’ by deeming a disposal of property for an inadequate consideration to be a donation to the extent that the consideration is inadequate.