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Trust deed changes

10 April 2008

The Johannesburg Tax Court has ruled in a case involving a trust known as T-Trust (whose primary asset was property in Houghton) that, where all the trustees and beneficiaries of a trust were substitutes, a new trust be created and that transfer duty be payable. It agreed with SARS in its contention that, by substituting all the beneficiaries for family members of another family unrelated to the donor, a new trust had been created, the property had been transferred and that the agreements were designed to avoid the payment of transfer duty. Although the case predates tax law amendments made in 2002, it does make transactions which happened prior to this vulnerable to attack. It is worth noting that other transaction taxes, such as capital gains tax and stamp duty, may inadvertently become owing as a consequence of such amendments

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