How does a trust work in South Africa?

Currently a trust is defined widely in the South African income tax legislation as meaning any trust fund consisting of cash or other assets that are administered and controlled by a person acting in a fiduciary capacity, where such person is appointed under a deed of trust or by agreement or under the will of a …

Can a trustee be a beneficiary of a trust South Africa?

THE TRUSTEES A BENEFICIARY may be appointed as TRUSTEE and, if there is no conflict of interest, the FOUNDER may also be so appointed. The TRUSTEES have no personal rights to or interest in the TRUST ASSETS but simply hold, administer and manage the TRUST ASSETS for the benefit of the BENEFICIARIES.

What are the 4 things required for a trust to be valid?

The UTC provides that a trust must meet the following requirements (UTC 402): 1) the settlor must have the capacity to create the trust; 2) the settlor must have the intent to create the trust 3) there must be at least one definite beneficiary; 4) there must be duties for the trustee to perform; and 5) the sole trustee …

What are the legal requirements of a trust?

A trust must therefore be sufficiently certain to be valid and so enforceable.

Certainty of Intention. The word ‘trust’ is not necessary to satisfy an indication of intention neither are technical words needed as ‘equity looks to the intent rather than the form’.
Certainty of Subject Matter.
Certainty of Object.

How is a trust taxed in South Africa?

Where the trust itself is taxed, it is taxed at a flat rate of 45%. Special trusts are taxed on a sliding scale from 18% to 45% (same as natural persons). Top Tip: Trusts do not qualify for any of the rebates provided for in Section 6 of the Income Tax Act.

Why is a trust a good idea?

To manage and control spending and investments to protect beneficiaries from poor judgment and waste; To avoid court-supervised probate of trust assets and be private; To protect trust assets from the beneficiaries’ creditors; To reduce income taxes or shelter assets from estate and transfer taxes.

What happens if a beneficiary of a trust dies South Africa?

Upon the death of the beneficiary, the assets will be included in his or her estate. If the trustees vest income or capital gains in a beneficiary, the beneficiary, not the trust, will be liable for tax on such distribution. Upon the death of the beneficiary, only these vested rights will be included in the estate.

How do trusts fail?

This can arise when gifts fails, so that it reverts to the donor or settlor (or their estate). Similarly , a trust can fail for many reasons. It could be void for uncertainty. It could break the rule against perpetuities or it could be that the declared trusts do not effectively deal with all the assets.

What are the three fundamental requirements of a trust?

Trust property (res) There are three generally stated requirements for the trust subject matter or “res”: It must be: an existing interest in property (at the time of trust creation and throughout the existence of the trust); capable of ownership and alienation (i.e., transferable to another person); and.

Who holds title and manages the property in a trust?

trustee
A trust is when one person (trustee) holds title to property for the benefit of another person (the beneficiary). A person called the settlor (or trustor) creates the trust and puts the property in the trust. The settlor, trustee, and beneficiary can be different people.

How much does a trust cost in South Africa?

Setting up a trust can cost between R4,000 and R12,000. Careful consideration must be given to the wording of the trust deed because you want to ensure that the trust is both tax effective, and also that your family will continue to benefit when you die.

What are the rules of trust in South Africa?

The rules of South African trust law are a mixture of English, Roman-Dutch and South African law. The Trust Property Control Act No. 57 of 1988 (TPCA) forms the framework in which trusts operate. All decisions and actions taken by the trustees must be made with reference to the trust deed and the TPCA.

What does lawtrust do for the South African government?

Working with the South African Department of Home Affairs, LAWtrust is bringing new levels of trust and security to the South African identity management landscape by replacing traditional green ID books with Smart ID cards.

When does the South African trust law book come out?

This book meets the demand for a text that explains the basic principles of South African trust law. Available 14 Jan 2019. Subscribers receive the product (s) listed on the Order Form and any Updates made available during the annual subscription period. Shipping and handling fees are not included in the annual price.

Can a non-resident be a trustee of a South African Trust?

Furthermore, non-residents may not be trustees of South African registered trusts. This is important to note where trustees decide to emigrate. A trust must be treated as a separate juristic person, and its identity shouldn’t be confused with that of the trustees or beneficiaries.

How does a trust work in South Africa? Currently a trust is defined widely in the South African income tax legislation as meaning any trust fund consisting of cash or other assets that are administered and controlled by a person acting in a fiduciary capacity, where such person is appointed under a deed of trust…