I’ve never been keen on the idea of transfering only the bare dominium of a property to a trust structure. Sure, you may save a bucketload of Transfer Duty and CGT but, if you do the numbers, taking into account the time value of money, the total tax paid up to the death of the usufructory is about the same either way (SARS isn’t stupid).

And, in the meantime, the trust owns a property that it cannot let out or sell, and it is responsible for the rates and upkeep.

So what was the point of the transfer? It runs contrary to the main object of a trust which, in my view, is to build wealth. And wealth, again by my definition, is accumulated passive income earning assets.

Having said that, such transactions do occur and I am then asked the question which forms the title of this article.

s66 of the Deeds Registry Act states quite clearly that the usufruct terminates on the death of the usufructory. At that point, the trust becomes the full owner of the property.