Changes in SARS regulations for the taxation of family trusts with assets in South Africa and / or abroad have put a bit of a dent in the massive tax savings afforded by putting one’s Estate into a Family Trust. The innovative tax solutions offered by family trusts came primarily from the family trust entity itself, and the tax laws and breaks afforded trusts.
That said, family trusts are still the best way to protect family wealth, particularly over generations.
While prior tax exemptions and benefits, particularly those to do with offshore investments, are no longer straight forward, family trusts still offer the opportunity to pay less tax than you (and your beneficiaries) would otherwise pay on your estate.
Creative tax solutions now come from purposefully innovative tax planning, estate planning, structuring (i.e. entity choice – e.g. Inter Vivo / Living Trusts, Bewind or Testamentary Trusts) and investment management of family trusts.
Family trust taxation from 2019:
- Still exempt form Estate duty but no longer exempt from Capital Gains tax, and subject to up to 40% income tax.
- Foreign assets: Family Trusts can be exempt from taxation on Foreign Capital assets but income from those assets is now subject to SA tax. There’s no getting around this thanks to new international reporting agreements. The ‘can’ is important. That’s what you’ll need your tax planning and structuring team for.
- Tax liabilities can be in the hands of the benefactor or the beneficiaries. Again, thank to some taxation variances afforded by this, taking it into account with innovative tax planning can save on tax payments.
Family Trust tax solutions – compliant and innovative:
Innovative tax solutions start with being compliant and up-to-date with changing South African tax and International regulations.
It’s essential now that family trust management is in the hands not only of trustees but a trust management team with expertise in the various Family trust structures available, changing tax regulations for trusts, and investments.
The team at TAT has accounting and legal experience for creating tax solutions within a family trust, contact us and we will assist you with some innovative and compliant ideas for your trust.
You might also be interested in
Starting March 1st, 2020, South Africa’s new Expat Tax laws come into effect. What does this mean for SA citizens living and working abroad? Here are some basic points – the things you need to know: Review: The Residence-based tax system – the ‘days rule’: In...
Thanks to tax benefits (among other benefits) off-shore company registrations and structures have always been ideal for: Import-export companies International trading companies Asset holding companies Family and other trusts Other property investments Intellectual...
Saving on the amount of tax you need to pay involves considerable tax structuring to your financial affairs both at home and abroad. Structuring tax for assets and investments in South Africa: There are a number of ways your accounting, tax and compliance team can...
With over 23 years of unwavering expertise, I am a seasoned Chartered Accountant committed to financial excellence. My journey in the realm of finance has been marked by astute strategic insights, meticulous attention to detail, and an unyielding dedication to precision. Over the years, I’ve navigated the complexities of financial landscapes, providing invaluable counsel to diverse clients. My proficiency extends across auditing, taxation, and financial management, coupled with a profound understanding of regulatory frameworks. As a registered professional, I have consistently upheld the highest standards of integrity and ethics, earning a reputation as a trusted advisor in the dynamic world of finance.