Page 49 - Nexia SAB&T Trust Guide 2025

SPECIAL TRUSTS

A trust in South Africa can also be used for another specific purpose, and be
categorised as a “Special Trust”.
For tax purposes the following types of special trusts are recognised:
Special Trust Type A – a trust created solely for the benefit of a person(s) with a
“disability”, as defined in section 6B(1) of the Income Tax Act (no.58 of 1962)*,
where the disability makes it impossible for the person(s) from earning enough
money for their care or from managing their own financial affairs: Provided that –
■ Such trust shall be deemed not to be a special trust in respect of years
of assessment ending on or after the date on which all such persons are
deceased; and
■ Where such trust is created for the benefit of more than one person, all
persons for whose benefit the trust is created must be relatives in relation to
each other.
Special Trust Type A trusts can be testamentary or inter vivos trusts and are
some-times created as a result of a court order in favour of a specified natural
person. In order to be classified as a Special Trust Type A, approval must be
obtained from SARS.
*Disability
A “disability”, as defined in section 6B(1) of the Income Tax Act means – a
moderate to severe limitation of a person’s ability to function or perform daily
activities as a result of a physical, sensory, communication, intellectual or mental
impairment. The disability must be diagnosed by a duly registered medical
practitioner, and that disability must have lasted or has a prognosis of lasting
more than one year.
Special Trust Type B – this is a testamentary trust created by a testator by or
in terms of his Last Will and Testament, which is created solely for the benefit
of a person(s) who is a relative of that testator, and such person(s) are alive on
the date of death of that deceased testator (including those conceived but not yet
born), and the youngest of the beneficiaries is younger than 18 years on the last
day of the year of assessment. A trust will cease to be a Type-B trust as from the
beginning of a year of assessment in which the youngest of its beneficiaries turns
18 years old.

47