Page 43 - Nexia SAB&T Trust Guide 2022

■ Provided the trustees are authorised by the trust deed to delegate their
authority to act, they must then issue the necessary authority for one trustee
to act on their behalf, failing which, all trustees are required to sign the
necessary documentation. A prior resolution of trustees is required authorising
the purchase or sale of any immovable property in the name of the trust. If
this is not effected, all of the trustees will be required to sign the Deed of Sale.
■ An asset register must be kept of each property acquired in a trust.
Advantages of buying or selling immovable property using a trust
Advantages
■ The trust is treated as an entity separate from the individuals.
■ Assets don’t form part of the insolvent estate in the event of sequestration.
■ Strict controls – trustees are accountable to Master of the High Court.
■ Special trusts formed for mentally ill or seriously disabled, will be allowed CGT
exemption if primary residence (and meets other requirements to qualify).
■ Special trusts – taxed at individual rates.
■ Trust deed can be set up so as to determine the manner in which trustees
administer the fixed property and the trustees are dutybound to obey these
wishes.
Disadvantages
■ The trust cannot be sold as an entity on its own.
■ The beneficiaries normally have discretionary rights which are not assets that
can be sold, such as shares.
■ Trustees cannot act until Letters of Authority have been issued.
■ The addition or substitution of a beneficiary in a discretionary trust may
trigger transfer duty if the trust holds residential property as per Section 1 of
the Transfer Duty Act (no.40 of 1949).
Transferring property into a trust should be considered in light of ongoing and
proposed tax law amendments – trusts should no longer be created to simply limit
taxes, but may still have other benefits. Each situation should be considered on its
own merits (with the aid of specialists in the field).
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