Page 36 - Nexia SAB&T Trust Guide 2022

■ Various taxation sections and anti-avoidance measures have been introduced
relating to trusts.
■ Estate Duty Act (no.45 of 1955) – Section 3(3)(d) of the Estate Duty Act is
relevant where the trust instrument contains a provision that empowers the
deceased, immediately before his death, to:
◆ Appropriate or dispose of property held in the trust.
◆ Revoke or vary the provisions of any donation, settlement, trust, or other
disposition made by him to the trust, for his own, or his estate’s benefit.
In addition, a trust deed may typically contain clauses that attempt to
protect the estate planner, such as the inclusion of a casting vote, or a
testamentary reservation. Such clauses may compromise him, and the
trust property, as a result, may be included in the estate of the deceased
as deemed property and attract estate duty. The fact that the deceased
had the ability to deal with the assets in the way envisaged in the Act, the
day before he dies, will result in the assets being included in the estate of
such a person upon death.
Thus, if the trust instrument permits the estate planner to have a casting
vote (an extra vote given by a person to decide an issue when the votes on
each side are equal, therefore a determining vote), the trust’s assets may be
included in the estate of the estate planner upon his or her death in terms
of the provisions of Section 3(3)(d) of the Estate Duty Act, thereby defeating
the object of creating a trust in the first place.
■ Protection of Personal Information Act (no.4 of 2013) (“POPIA”) –
commenced on 1 July 2020. All business and legal entities, whether owned
by individuals, companies, partners, sole proprietors, close corporations,
NGO’s/PBO’s, associations, which includes business trusts, are required to
comply with POPIA. The trustees of business trusts are required to adhere to
the 8 general conditions for the lawful processing of personal information of
its data subjects (whether they are its clients/suppliers or employees), as set
out in the Act, which can be summarised as:
1. Accountability
2. Processing limitation
3. Purpose specification
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