Primary residence Archives

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…

I am often asked whether it is wise to put one’s house into a trust. There are two answers – Yes and No. If you formed the trust mainly to protect assets from your creditors, then you may consider it worthwhile protecting your house in the same way. Be aware that if the house is bonded, then you will have to re-negotiate the bond and that particular creditor (the mortgaging bank) will be on the trust’s side of the firewall, so the house will only be protected from your creditors, not those of the trust itself. Also, if the house…

There are two potential benefits – asset protection and estate planning I’ve dealt with the first in another article, so what about estate planning? Two taxes kick in on your death (or that of your spouse dying second if you have bequeathed everything to each other). Estate Duty at 20% or 25% is taxed on you net assets at the time of death. There’s an allowance of R3,5m each and that is often enough to leave the house untaxed. You are deemed to have sold your assets to your deceased estate at the moment of death…

Primary residence

What does it cost to put my house in a trust?

If I put my house in a trust, is it protected from creditors?

Is there a benefit if I put my house in a trust?