Why an old shelf trust can be so useful
Any natural person can donate a total of R100 000 each tax year free of Donations Tax, so, if you want to protect your household goods and motor vehicles from creditors, buy an old shelf trust.
Your first donation would be dated in the first February in which the trust existed, the second a few days later in March and then every March thereafter. You and your spouse don’t have R200 000 floating around for each donation, so you simply record the donations and agree to owe the money to the trust.
Then you take a very detailed inventory of everything that you want to protect. Give each item the value that you would expect to get from a stingy second hand dealer. Then sell the goods to the trust. It pays with the money that you owe it. Date the sale after the date on which you became trustees. If anybody queries why you should have made those donations before you bought the shelf trust, the answer is that you made them knowing that you were going to buy the trust at some stage, that you had had it reserved for you all that time and that you did not want to miss the opportunity of the annual allowance on Donations Tax.
2 comments
Reply
I would want to know more about a trust account
Hi Nomfusi,
Your best bet is to read my book “16 Steps to Wealth”. You’ll find it at http://www.mylegacytrust.co.za
You can also book unlimited free Google Meet or Zoom meetings with me here https://harbourassociates.youcanbook.me/