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Fiduciary and usufruct interests

26 October 2006

Gordon Stuart looks at fiduciary, usufructuary or other like interests in property and explains their nature, implications and place in estate planning. Usufructs provide certain continuity benefits but they also have estate duty and capital gains tax implications. These aspects are illustrated by way of an example from the start (bequest) to the finish (final disposal of the property). Briefly, the following aspects are highlighted.

  • Impact of the bequest for tax purposes on an estate, here estate duty tax and capital gains tax implications are analysed.
  • Valuation of the usufruct in the estate of the usufructuary.
  • The tax implications of the difference between the bare dominium value of the property and its final disposal value for CGT purposes. The inability of otherwise valuable property to generate an income for a usufructuary is also looked at. Here the creation of either an inter vivos trust or a testamentary trust is raised as a solution.

Article on sapropertyinvestor.co.za
 

Reader Comments: 2
Tapiwa Zifungo 27/09/2013:

This is a well established piece of work.

Tolerant E Mutaki 09/10/2013:

A perfect write up.

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