Page 44 - Nexia SAB&T Trust Guide 2025

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 legislative amendments. Each situation should be considered on its
own merits (with the aid of specialists in the field).

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