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Trusts and Estate Planning

After a series of terribly frustrating visits to SARS, I have to write another article on this subject.

1) SARS themselves can’t make up their mind whether a trust is required by SARS to register for tax if it is dormant.

2) A trust should not earn taxable income if you listen to us.

3) So the trust will be dormant and in my view is not therefore a taxpayer. Apart from my discussions at SARS, I rely on the definition of a taxpayer in s1 of the Income Tax Act –

“taxpayer”

means any person chargeable with any tax leviable under this Act

4) So from now on we have again stopped registering trusts for tax (and then making them tax dormant) as it is a total waste of our time and your money.

Note that if the trust subsequently earns taxable income (most unlikely if you follow our advice), then it will have to be registered for tax from that tax year.

 

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