Trust Registration

1. To protect and administer assets that are intended for the trustees/beneficiaries.
2. Your personal estate is separate to that of the trust’s assets and will not be considered for the purpose of estate duties.
3. Should you for any reason become insolvent, the assets in the name of the trust are protected from your personal capacity and, therefore, cannot be obtained by creditors.
4. The trust assets are unaffected should one of the trustees pass away. There is continuity in a trust and the concept does not come to an end.
5. To pay and manage income benefits to beneficiaries (your dependants or family).

1. A minimum of at least 3 trustees are recommended, one of which should be an independent trustee – usually an accountant, attorney, or auditor.
2. A Trust will still be subject to a compliance obligation, where Annual Financial Statements will need to be compiled by a registered accountant/accounting officer, as well as tax returns that will need to be filed and submitted at SARS.
3. You will need to keep clear record of all decisions made within the trust.
4. A bank account will need to be set up in the name of the trust to account for any transactions by the Trust.

1. The Vesting or Discretionary Family Trust. This trust is set up between the founders and trustees whereby the founder’s assets are donated or sold to the trust. This creates a loan account. Should the assets be donated to the trust – there will be donation tax imposed on the trust. This trust also allows for additional assets to be acquired by inheritance or purchase.
2. The Business Trust. A business trust allows for a business to maintain operations with the intent of making a profit. A private business trust can be set up, and the trust capital holds vesting rights.
3. The Charitable Trust. This trust is protected by the income tax act and does not need to pay tax.
4. Special Trusts. A special trust may only be set up for a mentally ill person or someone who has a serious physical deformity. It is intended to protect the interests of someone who is described in the Mental Illness Act 18 of 1973.

Depending on the type of trust, different types of Tax contributors require by SARS.

Family Trusts are not subject to Capital Gains Tax on the assets placed in the trust, but the Trust itself is taxed at a flat rate of 45% on the income received from the assets within the Trust.

Special trusts are taxed on a sliding scale from 18% to 45% (same as natural persons).