Trusts in South Africa: Comprehensive FAQ [2026]

You draft and sign a trust deed, then lodge it with the Master of the High Court, who issues letters of authority to the trustees — and the trustees may only act once those letters are issued. Budget for the Master’s lodgement, a separate trust bank account, and the beneficial-ownership register. See how to register a trust.

The Act sets no minimum number — your deed does — and the Master will only authorise a trustee who is not disqualified (s 6(1A)) and who has furnished or been exempted from security. Appointing at least one genuinely independent trustee is strongly recommended, and the Master’s Office applies that in practice for a family trust whose trustees are all related beneficiaries. If the founder controls everything and the trustees are figureheads, a court can treat the trust as the founder’s alter ego: on divorce, trust assets can be counted in the founder’s estate where the founder had de facto control and, but for the trust, would have owned them (Badenhorst v Badenhorst [2005] ZASCA 116). Separately, where trustees ignore the deed, a court may treat the trust form as a veneer to be pierced in the interests of creditors (Parker [2004] ZASCA 56, which also insists that control be kept separate from enjoyment). Either way, both the asset protection and the tax planning can unravel.

In a discretionary trust the trustees decide each year whether and how much to distribute, so beneficiaries hold only a hope (spes) of benefiting. In a vesting trust the beneficiaries already have fixed, vested rights. The distinction drives the tax treatment and SARS’s IT3(t) reporting of every amount vested.

A person reaches majority at 18 (section 17 of the Children’s Act 38 of 2005). That age matters because the minor-child attribution rules — section 7(3) and paragraph 69 — which loop a child’s vested income and gains back to the funding parent, apply only while the child is a minor. Other attribution rules (ss 7(5), 7(6), 7(8) and 7C) do not depend on age — though from years of assessment starting on or after 1 March 2026, ss 7(5) and 7(6) apply only while the donor is a resident (Act 5 of 2026). Turning 18 does not override a deed that postpones a benefit.

A trust is taxed at a flat 45% on the taxable income it retains — the highest rate in the system. Taxable income is not gross receipts or cash kept; exemptions, deductions and the allocation rules come first. This is why most planning relies on the conduit principle: income vested in a resident beneficiary in the same year is taxed in that beneficiary’s hands, often at lower rates, not in the trust. See trust taxation.

An ordinary trust pays CGT at an effective rate of 36% (the 80% inclusion rate × the 45% statutory rate). An individual in the top bracket pays 18%, a company 21.6%, and a special trust is on the individual sliding scale. The 18% figure is the individual rate — never the ordinary-trust rate.

SARS multiplies the inclusion rate by the statutory rate. For an ordinary trust that is 80% × 45% = 36%; for a company 80% × 27% = 21.6%.

Donations tax is a 20% tax (25% on cumulative donations above R30 million) paid by the donor on the value of anything given away for nothing or for too little. The annual exemption for natural persons is published by SARS as R150,000 (clause 9 of the 2026 Draft Rates Bill, deemed effective 1 March 2026; promulgated amendment not located) — up from R100,000.

Yes — under the Act as it stands, a donation to a spouse who is not separated from the donor is exempt. The 2026 Budget announced a limit to a resident spouse, and clause 17 of the 2026 Draft Taxation Laws Amendment Bill (29 July 2026) proposes it, deemed effective 25 February 2026 for donations on or after that date. It is still a draft, but if enacted as proposed a gift to a non-resident spouse from that date will not qualify.

Section 7C catches an interest-free or low-interest loan to a trust (or to a company at least 20% held by that trust). The interest you give up is treated as a fresh annual donation. See section 7C loans.

The official rate of interest is 8.25% from 1 October 2026 — the Reserve Bank repo rate (7.25% from 25 September 2026, per SAnews) plus one percentage point; it was 8% from 1 June to 30 September 2026. It is the benchmark for the section 7C deemed donation, so a loan below 8.25% generates a charge. SARS’s Table 3 (June 2026 issue) has not yet been reissued and still shows 8% — confirm the current figure against it and the latest repo decision.

Rent received by the company is taxed in the company at 27%. When the company pays a dividend up to the trust, dividends tax of 20% is withheld — the conduit principle does not switch that off; it is a separate, largely final tax. A return of contributed tax capital is not subject to dividends tax, but it reduces the trust’s base cost in the shares and any excess is a capital gain (para 76B).

Because of the attribution rules. Where a child benefits by reason of a parent’s donation or disposition, section 7(3) deems the income to be the parent’s, and paragraph 69 does the same for capital gains — so vesting in a minor generally loops back to the funding parent.

A trust acts as a conduit: income a resident trust receives and vests in a resident beneficiary in the same year is taxed in that beneficiary’s hands, not the trust’s. Only income that stays in the trust is taxed in the trust at 45%. Since 1 March 2024 a resident trust’s income flows only to a resident beneficiary with a vested right. From years of assessment starting on or after 1 March 2026 (Act 5 of 2026), s 25B(1) is expressly subject to s 7(2) to (8) — where an attribution rule applies, the donor is taxed instead — and a non-resident trust’s income flows to any ascertained beneficiary with a vested right.

It is a roll-over relief that lets a person hand an asset to a resident company and receive equity shares in exchange. If the person holds a qualifying interest afterwards (for an unlisted company, at least 10% of the equity shares and voting rights), no immediate CGT arises — the gain is deferred, not forgiven. See section 42 in depth.

Usually not, where the asset is capital-held property. The s 42(5) recharacterisation is gated: it bites only where more than 50% of the value of the assets rolled in is attributable to allowance assets or trading stock — which a capital-held rental generally is not. The real 18-month risk is s 42(7) ring-fencing if the company on-sells the asset early. Letting the 18 months run remains conservative.

Usually not, if claimed correctly. Section 9(1)(l)(i) of the Transfer Duty Act exempts a genuine section 42 acquisition on the public officer’s affidavit — it has no vendor test of its own. Where VAT vendors are deemed one person under s 8(25) of the VAT Act, s 9(15A) is the route. Each exemption is tested on its own wording, and the trust’s later acquisition of shares in a residential property company is a separate, dutiable acquisition.

Securities transfer tax is 0.25% of the taxable amount. It bites when the company’s existing shares are transferred — but not when the trust subscribes for new shares (an issue is not a transfer). Transfers under the Part III roll-over rules (ss 42–47) are exempt, and so is the acquisition of residential-property-company shares that is subject to transfer duty (s 8(1)(n)).

A paragraph (a) special trust is a disability trust (inter vivos or testamentary, for a person with a disability per s 6B). A paragraph (b) trust is a testamentary trust for a deceased’s minor relatives. Only the paragraph (a) disability trust is within the s 7C(5)(c) exclusion, and special trusts are taxed on the individual sliding scale.

Two separate filings. The trustees lodge a beneficial-ownership register for the trust with the Master under s 11A of the Trust Property Control Act. Separately, the company files its information with CIPC — and since 1 July 2024 a company cannot file its annual return unless that filing is in place.

Two returns. Every registered trust files an ITR12T (2026 season: 19 September 2026 to 22 January 2027), and a resident trust also files the IT3(t) reporting every amount it vested — due 30 September 2026. On SARS’s position as recorded in SAICA’s IT3(t) guidance (18 September 2024), all amounts including R0 should be disclosed from the 2025 year, so file one even where nothing was vested. SARS uses the IT3(t) to check beneficiaries’ returns, so the two must reconcile — but a reported vesting is not automatically taxable in the beneficiary’s hands. Admin penalties for outstanding ITR12Ts have applied since 4 May 2026.

Only after the section 75 process. The conflict rules are switched off only where one person holds all the beneficial interests in all the issued securities and is the only director. Once the trust holds the shares, a sole founder-director must disclose the interest and have the trust, as shareholder, approve the agreement by ordinary resolution before entering into it (s 75(3)); with a board, the conflicted director discloses, recuses and the disinterested directors decide. An independent co-director does not replace that process. Once properly approved, the authorised signatory can sign.