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Trusts and Estate Planning

There are direct costs and there are opportunity costs.

Let’s look at the direct costs first.

Capital Gains Tax

Because you are a connected person in relation to the trust, the sale (you would not want to make it a donation) will be deemed to be at market value and CGT will apply at up to 18% of the increase in value over the base cost (purchase price plus cost of improvements) as if you had sold the house to a third party.

But don’t despair! Because this is your primary residence, you are allowed to make a capital gain of R2m before CGT kicks in.

Transfer Duty

Again, the transfer duty will apply to the market value, regardless of the sale price. Transfer duty starts at zero, then climbs to a maximum of 13% according to the scale below.


Conveyancer’s fees

These will depend upon the conveyancer and the value of the property. We recommend KG Tserkezis Inc. Speak to Dino and tell him that Derek referred you.

Interest and Donations Tax

You’ll have to lend the trust, or its company, the money to buy the house from you. Normally, SARS requires that you charge interest on the loan at a minimum of the official rate (which is published by SARS and is currently 5,25%). Any shortfall on the interest is deemed to be a donation each year and is therefore subject to Donations Tax at 20%. However, if the loan is in respect of your primary residence, this requirement falls away.

Bond renegotiation costs

If your house is bonded, you’ll have to renegotiate the bond with the bank and they normally charge a fee.

Now for the opportunity cost.

R2m allowance before CGT

If your primary residence is registered in your name(s), then upon selling it, you are allowed to make a capital gain of up to R2m before CGT kicks in. This would not be the case if the property is owned by a company or a trust.



  1. Morne Robertson

    Good day Derek, my mother’s paid up house comes to me if she’s not with us anymore, which means it’s still on her name currently. Can I transfer her house directly into a family trust instead of onto my name?

  2. Hi Derek

    Is there a difference between purchasing a property and then transferring it to a trust compared to just buying land and transferring it to a trust? What is the best way then to build etc. and develop that land?

    Thanks in advance.

  3. Evening,
    My brother in-law has a property currently bonded and wants to put this in the trust which myself and my wife are trustees. He wants to transfer the property into the trust name.
    My question is, are all the trustees subjected to Credit checks for him to transfer the property in the Trust and to get a good interest rate once in the Trust name?

    1. Hi Jeromme,
      The correct structure would be to form a company that the trust owns. The company buys the property from your brother. If the company needs to raise a bond, then it is the Director(s) who have to sign surety and will be subject to credit checks, not the trusteed=s.

  4. Good afternoon.
    In order to help family qualify for bond finance I co-signed on the bond and became a trustee of the property trust the house was transferred into. I have since resigned as a Trustee. My query surrounds technical ownership of the property in trust. My name is on the bond, but I am no longer a trustee. Since the trust owns the property, do I have any claim of ownership?

      1. Hi Derek.
        Thank you so much for your reply. Makes absolute sense. Was just trying to clarify the matter in my own mind.

  5. Hi Derek,

    I’m working a full time jobs and want to get 2 apartments (one for me and one for leasing) through a home loan. I’m kind of wondering how would I go about getting a bond but under the trust so that the properties are protected and which trust type would you recommend?

    I’m hoping to, in future, buy more property and lease it out as time goes in.

    I’m an entrepreneur in spirit and I also want to know how can I have a holding company work hand in glove with the trust in order to protect assets, make profitable gains, and be tax savvy?

    Thank you in advance.

    1. Hi Ntokozo,
      I trust that is your correct first name, if not I apologise.
      You are exactly the kind of person that I can help most.
      Your first step should be to go to and click on Read a Sample. Read the samples of all four books. Then decide whether you want to read any of them in full. The main one for you is 16 Steps to Wealth as it deals with the entire subject of property investment/trust.
      Once you have got your head around the concepts, you should book a meeting with me via These Zoom or Google Meet meetings are unlimited and always at no charge. We can then deal with your specifics, rather than having to deal with property and trusts generally before getting down to these specifics.
      I look forward to the first meeting with you

  6. hi Derek
    i just had my flat(primary residence) evaluated by the bank, its 650k and i would like to know should i sell this property to a trust( i hope to set up a family trust) will i get cash cash in hand for the sale?
    thank you verey helpful

    1. Hi Mzoli,
      No, the trust will have no money so it will owe you the R650K. If you need cash then the trust should raise a bond with the bank, then it will have money to pay you for the flat.
      If you want to set up a trust, then go to Buy 16 Steps to Wealth, log in and buy the trust after reading the book. The cost of the trust is reduced so that you end up paying nothing for the book.

  7. I am currently under debt review, and I have recently changed employment. With funds from my previous employer, I have managed to settle my bond and other small loans. My salary has ingreased from R470k in 2020 to at least R758k in 2023. I wanted to know if it will be possible to withdraw since I believe I am no longer over-indebted.


    1. Hi Robert,
      I’m sure it can be done, but it’s way outside my field of knowledge. Don’t you have a debt consellor when you go into review? If so, that would be the person to ask.

  8. Hi Derek

    I jointly own our house (primary residence) with my husband. We are behind on bond payments by a few months. My husband’s business is failing and we desperately need to protect our asset.

    I have an existing trust and want to enquire about transferring the bond (with Mercantile) to my trust.

    Please can you advise… or even better, can I schedule an appointment with you to discuss this further?

    Much appreciated

  9. Hi Derek

    I’m late to the thread.
    I wanted to ask: does Section 7C apply when the property I want to sell to the trust is not my primary residence (in a sense that I live there), but is a property at which my family lives and I do not derive rental income from it at all?
    I live in a different province than the residence, on another property I purchashed, and I stay at the property in question when I visit family.

    Should I sell this property to a company which sole shareholder is the trust?

  10. Dear Sir/Madam,

    I currently have a Bond with FNB, since 2016. I have been paying for the house. I would like to find out if it is possible to transfer the house from myself, e to a Trust. If it is possible, what are the requirements? The main reason for this transfer is because I plan to get married in Community of property, but I do not want this house to form part of the marriage as I consider it as security for my child who has a disability.

    Will really appreciate your feedback.


    1. Hi Joseph,
      Apart from the trust itself, which costs R10 000, you will be in for transfer duty on the value above R1,1m and conveyancers fees. You will need an independent trustee (someone not related to you) as well as yourself as a trustee. The trust will have to register for Income Tax. We charge R2 800, and Annual Nil tax returns must be submitted. There’s also a compulsory, once only return to the Master of the High Court in terms of the anti money laundering legislation. We charge R850 for that. You may prefer to book a chat with me here

    2. Hi Joseph,
      There are costs –
      Trust R10 000
      Register as a taxpayer R2 800
      Once only anti money laundering report to the Master R850
      Then Nil Annual Tax returns must be submitted
      You will also have to pay Transfer Duty on any value above R1,1m
      Plus conveyancers fees
      And Bond renegotiation fees
      Are you sure that you can only be married in COP? ANC is much better.

  11. Hi Derek. I inherited a fully paid apartment from my late husband I have a minor son and I would like to transfer the property into a Trust , this is our primary residence but I will be renting it out as I’m buying another apartment next year which will become our new primary residence.

  12. Monica Kruger

    Hi Derek,

    My two brothers and I are beneficiaries and trustees of a discretionary trust which owns a property and which will end when the property is sold. Valuation around R2m. We want the trust to continue.
    I want to “buy them out” and they resign as beneficiaries and trustees. My daughter and I will then be trustees and beneficiaries (she is a beneficiary through me).
    We are both directors of our small property company with no assets other than some cash.
    What is going to be the most cost effective way of us acquiring the trust and the property.
    I could sell my very cheap flat to the trust and buy the trust house from the trust to keep the trust going but I am not not sure this is going to help us.

    1. Hi Monica,
      The process is this –
      1) The Trustees and the Founder (if still alive) change the Trust Deed to remove them as beneficiaries
      2) They then resign as Trustees and you, as the sole remaining trustee appoint your daughter plus an independent (unrelated) trustee (now a requirement of the Master of the High court)
      3) The price that they will want is between you and them and has nothing to do with the actual process (1) and (2) above.
      If this doesn’t answer your question, then you need to book a meeting with me at . There’s never a charge for meetings.

  13. Hi

    I have a paid up house and Apartment under my personal name and would like to find out if I can transfer the properties to a trust.

    they both under R2m combined.

    besides transfer costs what other Cons will I face.


    1. Hi Khorombi,
      If the house is your Primary Residence, you will forfeit the R2m allowance before CGT.
      If these are rental properties they must be held in a company that the trust owns, not the trust itself.
      The reason is that a trust is taxed at 45% and a company is taxed at 27%.
      You need to book a virtual meeting with me here www.
      There’s never a charge.

  14. Hi Derek,

    I am married Ito customary law and would like to protect my assets. A section 21 and forfeiture application are not options I would like to go with and wondered if I could transfer my bonded property into a trust ? If so what is the procedure ? Thank you

    1. Hi Kim,
      1) You will be selling your house to the trust.
      2) It will owe you the money, so the sale will not have reduced your joint estate.
      3) There is no CGT if it is your primary residence.
      4) There is Transfer Duty if the market value exceeds R1m
      5) There are bond renegotiation costs and conveyancer’s fees.
      Your best bet is always to meet with me via Zoom or Google Meet.

  15. Hi Derek

    Just clarification on my previous comment. I neglect to mention that discovery bank’s valuation is R2.3m, that is how I arrived on the R2.3m in my calculation.

    1. Anybody (including you) can do the valuation. SARS can challenge it, so you can’t be stupidly low. However, Covid hit prices and you can almost certainly drop below R2,3m.
      The lower the value, the lower the Transfer Duty, conveyancers’ fees and loan accounts.

  16. Hi Derek,

    I want to sell my primary residence to the trust on a loan. My Wife and I are married within community of property, According to my knowledge we can each claim R100 000 donation to the trust annually. What will be the effect of that when I do a interest free loan to the trust to acquire the property.

    The CGT will not be applicable as it is our primary residence
    Base cost R1 900 000, improvements +- R1 000 000, Market value, the lowest is R3.75m therefor CGT less than R2m

    Sell to the Trust at R2.3m valuation, Interest payable by the trust will be @ 6.5% as per SARS but I base my calculation on the speculation that the interest rate will increase to +- 9%

    R2.3m x 9% = R207 000, Donation allowed is R200 000, therefore R7 000 will be taxable, but is lower than the threshold of R23 800. According to me, then there is no tax implications, is that correct?

    1. Hi Kobus,
      Re the effect of the donation on the loan, you only need to charge R7 000 interest (if the official rate goes to 9%) as the R200 000 which you don’t charge will be deemed to be a donation and you can donate that amount free of Donations Tax between you.
      The R7 000 will be taxable in your hands, but as you quite rightly say, it falls below the allowance of R23 800 each. So no tax implications as long as you have not used the allowance elsewhere.

      No CGT either as you correctly calculate. To summarise, you are spot on in all respects.

      There will still be Transfer Duty, conveyancers’ fees and, if the house is bonded, then there will also be bond renegotiation fees. Also, if it is bonded then the trust will have a creditor, which is not good. You should then rather form a company with the trust as the sole shareholder and sell the house to the company. That way, any other assets that the trust owns (hopefully only shares in companies) will not be exposed to the risk of the bond holder.

      It would be great to have a Zoom or Google Meet chat. You can set it up from our website home page.

  17. Hi Derek,

    My mom finished paying off her house primary residence. I want to start a property portfolio and have that under a trust, and want to include our family house. Property value and CGT <R1mil. I want to understand how the sale and lending money to the trust works. Can i just do a sale to the trust through a loan (and the interest requirement falls away) without providing any upfront liquidity to the trust?

    Thanks in advance

    1. Answering just that one question leads you into very uncertain territory. However, the answer is that if she sells the house on loan, then, because it is the seller’s primary residence, s7C interest does not apply.
      Now, if you plan to build a property portfolio, you need far more guidance than that. I can suggest two things.
      1) Read my book “16 Steps to Wealth” which you will find at and
      2) Make a Zoom or Google Meet appointment with me for a 2 hour discussion. There’s never a charge for meetings. You’ll find my diary here

  18. Ronel du Toit

    I have a townhouse in Bronkhorstspruit. Primary residence.
    Am involved in acompany of my 2nd husband, me as sole director, he was sequestrated some 8 years ago, but his kids rule the company now and I am only there to sign.
    My townhouse is mine from first marriage and I need to procure it for my children, and put in a trust, should the company have liabilities. I need to resign asap for my own good.
    Need assistance pse

    1. Hi Ronel,
      As the sole director of the company you are in control, so you must not resign until you have sorted this out. It is not clear how the company acquired the townhouse from you, but it should still owe you the money for it. As the company director there is no reason why you should not sell the townhouse to a trust in repayment of the debt to you. The trust will then owe you the money. However, if the townhouse is rented out, then you should form a company that is owned by the trust and sell the townhouse to the company. This is off the shoulder advice, because you have not given me all the facts. Best would be to book an online meeting with me via

    2. Hi Ronel, On re-reading your comment, I see that the townhouse is your primary residence, so you don’t need it to be owned by a company. It can be owned by a trust directly.

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