Page 40 - Nexia SAB&T Trust Guide 2022

■ A tax compliance certificate from SARS, indicating tax compliance of the trust.
■ Bank statements reflecting a nil balance on the final statement.
■ Proof that the beneficiaries have received their benefits.
■ A final set of Annual Financial Statements for the trust, reflecting a nil
balance sheet (nil assets and nil liabilities).
The first 3 documents listed above must be lodged with the Master of the High Court
with whom the trust has been registered. Upon receipt of the same the Master will
deregister the trust. Once the Master has confirmed its deregistration, SARS is then
notified to remove the trust from its taxpayer database.

TRUSTS AS A FINANCIAL AND ESTATE PLANNING TOOL

Trusts can serve a dual function of protecting assets as well as creating certain
taxation benefits.
To protect minor beneficiaries and incapacitated persons
■ Setting up a special trust for a mentally disabled or incapacitated person
allows for the safe custody of assets while at the same time benefitting from
lenient tax treatment from an income tax and capital gains tax perspective.
■ Setting up a testamentary trust for the benefit of minor children provides
some income tax benefits as well as preventing any funds being held by the
Guardian’s fund on behalf of the minor.
Protection against creditors
■ A discretionary trust may enjoy creditor protection in the case insolvency
(subject to insolvency rules).
■ Where the asset was transferred to the trust while the founder was solvent it
would be difficult for creditors to set aside the trust transaction.
■ Where there are vested rights – the protection is only afforded to those assets
in which the insolvent has no vested rights (a bewind trust provides no
protection in these circumstances).
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