Page 5 - Nexia SAB&T Trust Guide 2024

THE NATURE OF TRUSTS IN SA

Trust law in South Africa:
The rules of South African trust law originate from a mixture of English, Roman-
Dutch and South African law. It is possible in South Africa to have a valid verbal /
oral trust agreement which has not been reduced to writing. These oral /verbal trust
agreements are governed by the common law (this is a body of law developed by
South African judges and courts). Although the registration of a written trust deed
with the Master of the High Court does not impact on the legality of the trust deed,
section 6(1) of the Trust Property Control Act (no.57 of 1988), as amended, [and
hereinafter referred to as the Trust Property Control Act], states that no person may
act as a trustee without the proper authorisation from the Master of the High Court.
This authorisation is in the form of Letters of Authority. Accordingly, in most cases, a
written trust instrument is created, and registered at the applicable Master of the
High Court’s office in South Africa. This written trust instrument is automatically
governed by the Trust Property Control Act, which forms the framework in which
trusts operate, and regulates most aspects relating to a trust’s administration.
Legal status of trusts in South Africa:
A trust in South Africa does not have a separate legal personality and is not
treated as a separate juristic person that can be owned, sold, or transferred. It
does not have a separate legal personality, because it is simply an accumulation
of assets. Any property held in trust is held by the trustees in their capacity
as trustees, and cannot be “owned” by the trust itself. Trust property may be
movable or immovable, and may include contingent interests in property. Such
property is to be administered or disposed of by a trustee in terms of the deed.
Notwithstanding this, there are certain pieces of legislation in South Africa
that treat a trust as having a seperate legal personality – such as the Deeds
Registry Act (no.47 of 1937), Transfer Duty Act (no.40 of 1949), Value Added
Tax Act (no.89 of 1991), Income Tax Act (no.58 of 1962) and the Insolvency
Act (no.24 of 1936), as amended. The Companies Act (no.71 of 2008), in its
definition of a “juristic person”, includes a trust (irrespective of whether or not it
was established within or outside of South Africa).

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