Page 43 - Nexia SAB&T Trust Guide 2025

There must be loan agreement or a sale agreement in these circumstances.
Without an agreement, SARS could regard the transaction as a donation.
The loan agreement does not necessarily have to include an interest rate
provision, but must include a repayment date. However, since the introduction
of Section 7C to the Income Tax Act, to the extent that interest is not charged
on the loan at SARS’s official interest rate, it will be treated as a donation, as is
described in more detail below.

IMMOVABLE PROPERTY AND TRUSTS

Checklist when buying or selling a property using a trust
■ Review the trust deed, particularly the clauses pertaining to the powers
and authority of the trustees to act. They must have the requisite capacity
to contract on behalf of the trust regarding the acquisition or disposal of
property, or power to obtain a mortgage bond or pass a mortgage bond over
any immovable property held in trust by them.
■ The trustees must be duly authorised to act in terms of the most recent
Letters of Authority issued by the Master of the High Court, or Master’s
Certificate, if the trustees have changed.
■ Obtain all signing trustees’ identity documents, and other FICA documentation.
■ The board of trustees must be properly constituted. The minimum number of
trustees required by the trust deed must be appointed.
■ 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.

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