Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
B-BBEE
Blog
Company Secretarial
Featured
General Business
General Interest
Investing in Property
Marketing
Personal Growth
Personal Wealth
Tax
Trusts and Estate Planning
Uncategorized

I often meet with someone who registered a trust a few years ago and never used it. They now realise the benefits of building their wealth in a trust structure and wonder whether they should use the old one or create a new one.

Advantages of a new one:

  • It can be registered at the Master’s office in Johannesburg. This is the only Master’s office that we are aware of that is actually functional right now (although things may change). Also, we have a dedicated postbox in their office. So, it is much easier to deal with them than others.
  • The procedure is a lot simpler, so there’s less chance of a snag arising and delaying the process.

Disadvantages:

  • There is no cost saving as the fee is the same.
  • A Beneficial Ownership return must have been done for both the old one and the new one.
  • The new trust has to be registered as a taxpayer at SARS, even if it will never earn taxable income.
  • If the old one is registered as a taxpayer, then Nil returns will still have to be done unless you deregister the trust as a taxpayer at SARS.

2 comments

  1. Very helpful as always, thanks. Just a further thought… if the old trust was never registered as a taxpayer (and never used apart from interest on the bank account), when deciding to utilise it now, is it necessary to submit tax returns since day one of registration? This would be a significant disadvantage.

    1. Hi Fred,
      Let’s look at the reality of the situation. The trust is obliged to register as a taxpayer. From your comment, it appears to have earned interest, which was taxable. That being the case, the past tax returns should be submitted. This is not a difficult job since, once you have done one return, the rest follow the same pattern. So, I would suggest that you submit them yourself. If you don’t want to go through the learning curve, then pay someone to do register the trust and do the first return, then copy the format yourself for subsequent years. We can assist if you don’t have someone on tap.
      If no taxable income was earned (i.e. no interest), I would be inclined not to submit the past returns as, despite it being technically required, there would be no prejudice to SARS.
      Don’t forget to submit the Beneficial Ownership Return to the Master of the High Court – that’s most important.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Looking for even more informative content? Check out the books I have written which have proved to be very popular.

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help