The taxation of trusts in South Africa

Irmer, Ingrid

The taxation of trusts in South Africa

Thesis / Dissertation

1998

Abstract

Trusts are extensively used, primarily for estate and tax planning and more recently for business purposes. Frequently being the recipients of large amounts of income, trusts are often used as vehicles to minimize or avoid the incidence or levying of tax, rendering the taxation of trust income and issue of great significance. Depending upon the circumstances, trust income, in terms of the Income Tax Act No. 58 of 1962 [as amended and hereinafter referred to as "the Act"], may be taxable in the hands of the trust and/or the beneficiary and or the donor. The aforesaid possibilities have in the past generated several uncertainties with regard to ultimate tax liability for trust income and have also been the source of various tax avoidance stratagems, so much so that the Act has, in an attempt to remove same, over the years, with a relative degree of success, been amended. This dissertation, which concerns the taxation of Trusts in South Africa, will be focused on the income tax treatment of trusts as opposed to the various other types of trust taxation such as donations tax, estate and transfer duty, which exist. The taxation of trust income in general will be traversed with specific emphasis being placed on past and current important and in some instances, rather controversial, issues relating thereto.

Keywords

Law

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