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Trusts and Estate Planning

Only if it is badly drafted (or in very exceptional circumstances)

The first problem is that most drafters of trust deeds (in fact every one that I have ever come across except those who copy from my trust deeds) will declare the intial donation of R100 or rarely, some other cash amount. The Trust Properties Control Act requires that as soon as a trust receives cash, it must open a bank account, so those trusts have to open a bank account just for the R100! Guess how soon the donor finds himself lending more money to the trust just to pay ongoing bank charges!

If you decide to register your trust for tax, SARS wants the banking details, but on the application you can state that the trust has no bank account and then insert an alternative bank account in its place (with the consent of the other account holder), so that gets around that one.

The next problem arises because of the failure of the drafter to fully understand the tax implications of income earned in a trust or simply getting too clever in income splitting – an apparently neat way to minimise tax that sounds great at the seminar but which invariably requires more effort than it is worth. This results in the trust earning income from investments which, unless very carefully handled, is decidedly tax inefficient and, of course, requires the trust to have a bank account.

The third reason why your trust may end up opening a bank account is because the organisation selling it to you is a banking institution. Well, that one’s obvious isn’t it?

So, if anyone talks about a trust having bank accounts, beware, their tax saving schemes are almost certainly impractical and will never be properly implemented and maintained by you in the long run or maybe they just want the bank charges.



  1. I am reading this now trying to figure out how to open bank account for the registration at SARS requirement and read the comment now that says hope it is not registered as a tax payer? According to my knowledge the moment a trust holds shares in a holding or any other company, you now need to have a bank account and must be registered for tax, as you cannot complete any tax returns of the company without entering the trust tax number in there? Or am I missing something?

    1. Hi Joanne,
      You are close to the mark.
      All trusts have to register as taxpayers regardless of whether they own anything. Read this article
      They are only required to open a bank account if they receive money. Trust Property Control Act.
      They do not need a bank account to register as a taxpayer. You will see this when you register the trust on efiling.

  2. Any suggested banks to approach to open an Inter-Vivos Trust bank account, and what type of account is recommended?
    We have tried approaching FNB, and they had no idea how to open the bank account for the Trust.

    1. Huh? I can’t believe FNB are so thick. I confess that when I form a trust, I draft the Trust Deed in such a way that the trust does not need a bank account, so I can’t recommend any particular bank. However, we have a very close working relationship with Asha 0117726487 and Kerry-Anne 0833076509, both at Standard Bank. If they can’t help tell them to talk to me, they know my number.
      The only reason you should be opening a bank account is because you must deposit the R100 initial donation that forms the trust, so it would be a current account. That soon goes in bank charges, so once gone, I suggest you close the account as it serves no other purpose (provided your structure is correct).
      If none of this makes sense, then I suggest you read my book “16 Steps to Wealth” here or have a chat with me via Google Meet or Zoom. Here’s where you access my diary

  3. John Akester

    If I have opened an account for my trust based on advice, but the trust just owns a property with no income or expenses, which costs R206 per month in bank fees. Can I cancel the account and remain legal.

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