English |  
Wines of South Africa
Trade and Investment

Business Trusts

In South Africa, the Trust Property Control Act, 1988 governs the formation and operation of trusts. Through a trust, trustees for the benefit of nominated beneficiaries can carry on a business. The trust affords limited liability in that neither the trustees nor the beneficiaries are liable for the obligations thereof. The trust does not have a separate legal personality (other than for taxation purposes). The trust assets vest in the trustees, who hold them for the benefit of others. A trust is usually formed by means of a trust deed, which needs to be lodged with the Master of the High Court. No trustee can act in the capacity of a trustee until a written authorization is obtained from the Master. The Master can request security, but exemption is usually granted.

The benefit of a trust is that the onerous provisions of the Companies Act do not apply. A trust need not submit financial statements and does not have to appoint an auditor. There is no limit on the number of trustees or beneficiaries that are permitted. There are income tax benefits in making use of a trust. Where income is distributed by a trust, it is considered the income of the recipient and is taxed in the hands of the recipient and not of the trust.

In this way, effective splitting of income can be achieved, subject to the tax avoidance provisions of the South African income tax legislation. Distributions to beneficiaries of profits of the trust are not subject to STC, as with companies and close corporations. A trust is taxed on 40% of its net capital gain.

Source: www.cipro.co.za

For more information, please contact:
Companies and Intellectual Property Registration Office (CIPRO) of South Africa
Tel.: 0861 843 384; +27 (12) 394 9500
Fax: 0861 843 888; +27 (12) 394 9501
E-mail: info@cipro.gov.za
Website: www.cipro.co.za

Ms. TSD Nxumalo Consul-General
More Information
Statistics South Africa
South Africa Reserve Bank
South African Revenue Services
Johannesburg Stock Exchange
Government Online
South African Airways
South African Tourism
South Africa Broadcasting Corporation
Trade and Investment of South Africa (TIISA)
Public holidays in South Africa
Study in South Africa
South African Links
© South African Consulate-General Milan, Italy | Disclaimer