Page 45 - Nexia SAB&T Trust Guide 2024

TAXATION OF TRUSTS

Tax Rates for Trusts
Tax rates applicable to trusts are as follows:

Type of Trust Income Tax Rates Capital Gains Tax
Inclusion Rate
Normal or “Ordinary” Trust 45% 80%
Special Trust Same as those applicable 40%
to natural persons, except
that the rebates and
interest exemptions do
not apply. The tax rates
for natural persons for the
2025 year of assessment
is between 18% to 45%.

For taxation purposes a trust is considered to be a separate “person”.
A trust will be considered to be resident for tax purposes if it is incorporated,
established, formed or has its place of effective management in South Africa.
Depending on the circumstances, trust income can be taxed in the hands of the
donor, beneficiary or the trust.
A grey area exists where a trust distributes a capital gain to a non-resident
beneficiary. Trustees should therefore seek advice before making capital
distributions to non-resident beneficiaries, as in terms of the SARS interpretation
the capital gain would most likely be taxed in the hands of the trust.
Income Tax
Trustees may create tax efficiencies based on the timing and amounts of
distributions made to beneficiaries.

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