Page 32 - Nexia SAB&T Estate Planning Guide 2024

n If a trust does not have an independent trustee appointed, and, depending
on the way the deed is set out and the trust assets administered, these
“benefits” or protections may fall away.
n Due to exchange control regulations, South African trusts may not own direct
international/foreign assets. This means an international trust is required
to be set up in regard to foreign assets, for exactly the same reason that an
estate planner may set up a South African trust for his South African assets.
n A trustee should acquaint himself with the trust deed and adhere actively to
his duties and responsibilities.

Donations
n An estate planner may donate one of his assets or cash to another and so
reduce his estate during his lifetime, creating an estate duty saving.
n Donations are regulated by the Income Tax Act, which provides that:
u Donations tax is payable by any individual living in the Republic of South
Africa, or any South African company or one managed or controlled
in the Republic, on the value of any gratuitous disposal of property,
including the disposal of property for inadequate consideration and the
renunciation of rights.
n Donations tax is payable at the end of the month following the month in
which the donation was made, at a flat rate of 20% on the first R30 million
donations.Donations tax on the donations in excess of R30 million will be
25%. Only a donation from 1 March 2018 will count towards the R30 million
threshold.
It is important to note which donations are exempt from donations tax, when the
estate planner considers whether to include donations in his estate plan.
Principal exemptions
1. Donations between spouses.
2. Donations to charitable, ecclesiastical and educational institutions, and
certain public bodies in the Republic of South Africa (limited to certain
thresholds).
3. Donations by natural persons not exceeding R100,000 per year.

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