Trust registration
Everything you need to know about registering a trust
Trust registration
Everything you need to know about registering a trust
Setting up a Trust
Get immediate answers to your questions
First hour of consultation is FREE
GET IMMEDIATE ANSWERS TO YOUR QUESTIONS
The first hour of consultation is FREE
Types of Trusts

Vesting Trust

Vesting Trust
Discretionary Trust


Discretionary Trust
What type of trust should i Set Up?
We usually draw up discretionary Inter-Vivos Trusts for asset protection.

INTER-VIVOS TRUST

TESTAMENTARY TRUST
What type of trust should i Set Up?
We usually draw up discretionary Inter-Vivos Trusts for asset protection.

INTER-VIVOS TRUST

TESTAMENTARY TRUST
Why is a trust useful?

Protect assets or shares
Assets can be transferred to a trust. These assets are then not owned by you and it does not form part of your personal estate. This leaves you free to sign sureties in your personal capacity and not have it affect the trust’s assets.
Also, shares of a company can be held by a trust instead of by you personally. Thus, it does not form part of your personal assets. If you have signed surety, your personal creditors can not execute against the assets in the trust. Your personal creditors can also not execute against the company’s assets that now belong to the trust or its shares that now belong to the trust.

Protect assets or shares
Assets can be transferred to a trust. These assets are then not owned by you and it does not form part of your personal estate. This leaves you free to sign sureties in your personal capacity and not have it affect the trust’s assets.
Also, shares of a company can be held by a trust instead of by you personally. Thus, it does not form part of your personal assets. If you have signed surety, your personal creditors can not execute against the assets in the trust. Your personal creditors can also not execute against the company’s assets that now belong to the trust, or its shares that now belong to the trust.

Reduce the costs & taxes you pay when you pass away
When you pass away, 20% goes to the state if the value of your estate exceeds R3.5m. Furthermore, you will pay 6% to 7% in executor fees for winding up the estate. If your personal estate has R10m, you will lose R2m to taxes and costs.
If the assets were in trust, the trust will still own the assets with your passing. Thus, there is no taxable event. The beneficiaries or someone on their behalf will simply take over the management of the trust and its assets.

Reduce the costs & taxes you pay when you pass away
When you pass away, 20% goes to the state if the value of your estate exceeds R3.5m. Furthermore, you will pay 6% to 7% in executor fees for winding up the estate. If your personal estate has R10m, you will lose R2m to taxes and costs.
If the assets were in trust, the trust will still own the assets with your passing. Thus, there is no taxable event. The beneficiaries or someone on their behalf will simply take over the management of the trust and its assets.

Leave assets to beneficiaries (and descendants)
Just by bypassing your personal estate, the full value of the assets and their income potential is transferred to the beneficiaries. The beneficiaries usually consist of your descendants like your children. Your children can thus become the trustees of the trust if you prefer, someone else can manage the trusts and their assets on their behalf.
Trusts are very useful in instances where both parents have demised and the child can not legally control the inherited estate. In such instances, the entire estate gets paid to the guardians’ fund and only when the child turns 18 is he/she entitled to the funds. Trusts on the other hand can be used to hold the assets on behalf of the minor children, and someone trustworthy can be appointed to manage the trust on their behalf.

Leave assets to beneficiaries (and descendants)
Just by bypassing your personal estate, the full value of the assets and their income potential is transferred to the beneficiaries. The beneficiaries usually consist of your descendants like your children. Your children can thus become the trustees of the trust if you prefer, someone else can manage the trust and its assets on their behalf.
Trusts are very useful in instances where both parents have demised and the child can not legally control the inherited estate. In such instances, the entire estate gets paid to the guardians’ fund and only when the child turns 18 is he/she entitled to the funds. Trusts on the other hand can be used to hold the assets on behalf of the minor children, and someone trustworthy can be appointed to manage the trust on their behalf.
Trusts as Shareholders of your company
If you put your company’s shares in a trust, those shares are not part of your personal estate. The trust will then own and control the voting rights as we share equity. This is useful if the directors are asked to sign sureties. The creditor may only execute against the surety and not against the trust. The trust’s assets are thus safe unless the trust has also signed surety.
Trusts and taxes
Income Tax & the Conduit Principle
Trusts are taxed at 45% of its income. You can however utilize the conduit principle in trust law to have the income of the trust flow through the trust to the beneficiaries. The income is then taxed on the beneficiaries scale. If that distribution is below the minimum taxable income, the distribution is free of tax.
Donations Tax
Should you donate more than R100,000.00, you will be taxed 20% on the value exceeding 100,000.00 in any given year. A trust is allowed to donate no more than R10,000.00 a year. After that, it will be taxed 20% on donations. Spouses can donate to each other without incurring any taxes. Donations to public benefit organisations are also donations tax-exempt.
Transfer Duty
Is a tax that is payable if the trust sells a property. The amount depends on the value of the property being sold. Besides transfer duty, the trust will also have to pay bond registration fees and legal costs associated with the transfer.
Capital Gains Tax
On certain assets such as property, you would have to pay a tax called capital gains tax if the trust sold the property for more than what it bought it for.
Do you need A Trust?
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About Breyten Potgieter
Breyten Potgieter is one of South Africa's leading insolvency attorneys. Get the right advice for you and your business. Know your option when it comes to Voluntary Liquidation.
When things get tough, you don’t have to face them alone. Our team has helped thousands of people to get out of debt, and back on their feet, with over 12 years of experience in liquidations, sequestration, insolvency rehabilitation, trusts and company registrations, we are the professionals you need to get you taken care of.


About Breyten Potgieter
Breyten Potgieter is one of South Africa's leading insolvency attorneys. Get the right advice for you and your business. Know your option when it comes to Voluntary Liquidation.
When things get tough, you don’t have to face them alone. Our team has helped thousands of people to get out of debt, and back on their feet, with over 12 years of experience in liquidations, sequestration, insolvency rehabilitation, trusts and company registrations, we are the professionals you need to get you taken care of.