Botswana's Capital Transfer Tax Act charges tax on gifts and inheritances and makes the donee liable for it. Property outside Botswana is exempt only where the person beneficially entitled is domiciled outside Botswana, so property inside Botswana remains chargeable whoever receives it and wherever they live.
Section 7 of Botswana's Capital Transfer Tax Act runs to one sentence: the person liable for capital transfer tax shall be the donee. That sentence, rather than any currency rule, is what decides the position of an Australian beneficiary of a Botswana estate. The Bank of Botswana's own record of its milestones puts the abolition of all remaining exchange controls in 1999, following accession to International Monetary Fund Article VIII status on 17 November 1995, so a payment leaving needs no approval. The tax on what is being paid attaches to whoever receives it.
Key Takeaways
- Botswana's Capital Transfer Tax Act makes the donee, not the estate or the donor, the person liable for the tax.
- A chargeable disposal covers a gift and an inheritance alike, and includes a gratuitous waiver or renunciation of a right.
- The exemption for property abroad requires both that the property is outside Botswana and that the beneficiary is domiciled outside it.
- The charge is on the aggregate of what one donor gives one donee in a tax year, which runs from 1 July.
- Rates for a person other than a company run from 2 to 5 per cent in bands, with the first P100,000 of a deceased estate's distributable value deducted.
Which instrument decides the question
Capital transfer tax is levied under the Capital Transfer Tax Act, Chapter 53:02, which the Botswana Unified Revenue Service publishes in full and describes on its own pages as a tax on the transfer of property by way of gift or inheritance. The Act is short. It was passed in 1985 and amended in 1996 and 1997, and it commenced on 31 May 1985.
Its long title is a good summary of its reach: an Act to provide for the levying of capital transfer tax on gratuitous disposal of certain properties and on inherited properties. Two ideas are being taxed together, and the Act keeps them together throughout. It does not have one regime for the living and another for the dead.
The sentence that decides who is taxed
Section 7 reads in its entirety: the person liable for capital transfer tax shall be the donee.
That is the whole of it, and it puts Botswana on a different footing from the countries whose estate duty is levied on the deceased's estate before anything is distributed. Here the liability attaches to the recipient. Section 2 then defines a donee as any beneficiary of a chargeable disposal, including a trustee to whom property has been disposed of for the benefit of a beneficiary, and section 9 puts the return-filing duty on the person liable.
Section 3(1) sets the base. Tax is charged on the aggregate taxable value of all chargeable disposals made by a donor to a donee in any tax year, at the rates in the First Schedule. The tax year is a period of twelve months beginning on 1 July. Section 3(3) adds that where the value of a chargeable disposal accrues to two or more people in undivided shares, it is treated as accruing to each of them equally.
What counts as a disposal, and where the property has to be
A chargeable disposal is defined in two limbs: any gratuitous disposal of property, including any gratuitous waiver or renunciation of a right, or any property devolving on a person by way of inheritance.
The words in the middle are the ones that catch people out. A renunciation is itself a disposal. Deciding not to take something is treated as an act with a value rather than as a way of standing outside the Act.
"Property" is defined as any right in or to movable or immovable, corporeal or incorporeal property wherever situated. So the Act's starting position is unlimited by geography, and geography then re-enters through an exemption rather than through the charge.
That exemption is section 4(1)(b), and it is the provision that decides the point for an Australian beneficiary. It exempts the value of the disposal of any property situated outside Botswana if the person beneficially entitled to it is domiciled outside Botswana. Two conditions, joined. The Revenue Service's own summary of the exemption is shorter and one word of it is different: disposal of property outside Botswana if the beneficiary lives outside Botswana.
Read either way, it does nothing for a beneficiary in Australia inheriting a house in Gaborone. That property is situated in Botswana, so the first limb fails, and the exemption is unavailable however clearly the second limb is met. The two wordings do differ on the second limb, and the Act's is the one that governs: it asks where the person is domiciled, while the Revenue Service's summary asks where they live. What domicile means for a particular person is a question of Botswana law and this guide does not answer it.
The reliefs that do apply
Three exemptions in section 4 and three deductions in section 6 shape the figure that is actually charged.
| Provision | Effect |
|---|---|
| Section 4(1)(a) | Inheritance by a spouse on the death of the other spouse is exempt, as is a lifetime disposal to or for the benefit of the donor's spouse |
| Section 4(1)(c) | Property disposed of for the maintenance, education or training of a child is exempt, to the year the child turns 21 or, if full-time education or training continues after that, the year it ends |
| Section 4(1)(e) | Casual gifts totalling no more than P5,000 to any person in a tax year are exempt |
| Section 6(a) | The first P100,000 of a deceased estate's distributable value is deducted, apportioned so that each beneficiary's share of the P100,000 matches their share of the distributable estate |
| Section 6(b) | Expenditure the donee incurred wholly, exclusively and necessarily in effecting the disposal or obtaining possession is deducted |
| Section 6(c) | Debts the donor owed to persons ordinarily resident in Botswana in respect of the property disposed of are deducted |
Section 4(1)(c) is worth noticing on this corridor for a reason unrelated to death. Property disposed of for the maintenance, education or training of a child is outside the charge until the year the child turns 21, and beyond that year only while full-time education or training continues. The exemption is written by reference to the child's age and study rather than to an amount.
Section 5 closes the obvious route around the charge. Where property has been disposed of for a consideration the Commissioner considers inadequate, that property is chargeable, and its taxable value is the difference between what was actually paid and the market value. Selling a family house cheaply to a relative abroad is a partial gift in the Act's eyes.
What the rates come to
The First Schedule sets bands for a person other than a company: 2 per cent on the first P100,000 of aggregate taxable value, 3 per cent on the next P200,000, 4 per cent on the next P200,000, and 5 per cent on the balance. A resident company and a non-resident company are each charged a flat 12.5 per cent.
The provision that matters most on this corridor is not the rate but section 7, because the rate decides how much is owed and section 7 decides who owes it. The answer is the person who received the property, not the person who left it.
Section 8 explains how the value is arrived at for the harder cases, including annuities and life interests, which are capitalised at six per cent over the fixed period or the expectation of the donee's life. Section 10 borrows most of the administrative machinery of the Income Tax Act, so assessment, objection and collection run on the same rails as ordinary tax.
What none of that settles is the Australian end. How the same inheritance is treated once it arrives here is a separate body of law, on which this guide says nothing, and it is one of the situations where a registered tax agent in each country is doing different work; the guide on how to find an accountant covers how to check that the one you approach is registered.
Where to look next
- Receiving money from Botswana - the live pula to Australian dollar rate page for this corridor, which is what an inherited sum converts at on the day it is transferred.
- AUD to BWP - the convert page for the pair, with the pula's crawling peg and its basket behind it.
- How international transfers work - the sequence a payment moves through once the Botswana end is settled.
- Understanding transfer fees - what it costs to move a one-off sum, and the margin inside a rate.
Sources
- Capital Transfer Tax Act, Chapter 53:02, published by the Botswana Unified Revenue Service - the long title and the 1985 commencement; the section 2 definitions of chargeable disposal, donee, donor, inheritance, property "wherever situated" and tax year; section 3's charge on the aggregate taxable value of disposals from a donor to a donee and the undivided-shares rule; the section 4 exemptions, including 4(1)(b) on property situated outside Botswana where the person beneficially entitled is domiciled outside it, 4(1)(c) on maintenance and education of a child, and 4(1)(e) on casual gifts; section 5 on inadequate consideration; the section 6 deductions; section 7 on the donee's liability; section 8 on valuation; section 9 on returns; section 10 on the Income Tax Act provisions applied; and the First Schedule rates.
- Capital Transfer Tax, Botswana Unified Revenue Service - the Revenue Service's own description of the tax as levied on transfer of property by gift or inheritance, its statement that the person liable is the donee or beneficiary including a trustee, its summary of the exemptions and the allowable deductions, and its account of the charge where consideration is inadequate.
- Milestones, Bank of Botswana - the entry for 1999 recording that all remaining exchange controls were abolished, and the entry for 17 November 1995 recording that Botswana acceded to International Monetary Fund Article VIII status, removing all exchange controls on current account transactions and further liberalising controls on the capital account.
General information about how Botswana taxes gifts and inheritances in the hands of the person receiving them. Whether a particular estate or gift is chargeable, and how Australia treats the same amount, are questions for a registered tax agent in each country. Not financial advice, not tax advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
Who pays capital transfer tax in Botswana?
Section 7 of the Capital Transfer Tax Act is one sentence: the person liable for capital transfer tax shall be the donee. The Act defines a donee as any beneficiary of a chargeable disposal, including a trustee to whom property has been disposed of for the benefit of a beneficiary. The Botswana Unified Revenue Service states the same in its own description of the tax.
Does living in Australia take a beneficiary outside the tax?
Not on its own. The exemption in section 4(1)(b) covers the value of the disposal of property situated outside Botswana, and only where the person beneficially entitled to it is domiciled outside Botswana. Both limbs have to hold. Property situated inside Botswana is outside the exemption whoever receives it and wherever they are.
Does the tax apply to gifts as well as inheritances?
Yes. A chargeable disposal means any gratuitous disposal of property, including a gratuitous waiver or renunciation of a right, or property devolving on a person by way of inheritance. The charge falls on the aggregate taxable value of all chargeable disposals made by one donor to one donee in a tax year, and the tax year runs from 1 July.
What deductions and exemptions reduce the amount?
Section 6 deducts the first P100,000 of a deceased estate's distributable value, apportioned among beneficiaries in the ratio of their shares, along with expenditure the donee incurred in effecting the disposal or obtaining possession, and debts the donor owed to persons ordinarily resident in Botswana in respect of the property. Section 4 exempts casual gifts up to P5,000 to a person in a tax year.
What are the rates?
The First Schedule sets, for a person other than a company, 2 per cent on the first P100,000 of aggregate taxable value, 3 per cent on the next P200,000, 4 per cent on the next P200,000 and 5 per cent on the balance. A resident company and a non-resident company are each charged at 12.5 per cent. Section 9 requires the person liable to furnish a return.