The Trust-and-Company Structure in South Africa: How It Works & Why People Build It [2026]

What the structure looks like

The structure has three layers, plus the people who benefit:

• A company (often a newly formed private company, Newco) owns the asset — here, immovable property.
• A trust owns the shares in that company.
• The beneficiaries (typically the founder, a spouse, children and often later generations) are those to whom the trustees can distribute income, capital gains or capital.

Because the trust — not the founder — owns the shares, the property is generally beyond the reach of the founder’s personal creditors. The Trust Property Control Act reinforces this by keeping trust property separate from the trustee’s own estate:

Meet the players — and why they are nearly always “connected persons” to one another — on the players & connected persons.

Why people build it

The structure is about four longer-term goals, not income tax today:

• Pegging the estate. Once the property sits under the trust, its future growth accrues to the trust, not the founder — capping the founder’s dutiable estate (though the loan account they take out stays in it). Estate duty is 20% on the dutiable estate to R30 million and 25% above.
• Asset protection. The trust, not the founder, owns the shares, so the asset is generally beyond the founder’s personal creditors (TPCA s 12, above).
• Continuity and flexibility. A trust does not die, so the asset need not be transferred and re-taxed on each death; a discretionary trust lets the trustees decide each year who receives what.
• Provision for family across generations.

Every one of these benefits depends on the founder genuinely giving up control — see trustees’ duties and the independent-trustee rule.

The headline trade-off

A trust that keeps income is taxed at a flat 45% — the highest rate in the system — and pays capital gains tax at an effective 36%. An individual is taxed on a sliding scale and pays CGT at a top effective rate of 18%; a company pays 27% income tax and 21.6% effective CGT. This is why these structures rely on the conduit principle: income and gains are usually vested in beneficiaries in the same year so they are taxed in the beneficiaries’ hands, often at lower rates. The catch — and the rest of this guide — is the web of rules that decides when that works.

The Nkosi family — our running example

Build it, step by step

The restructuring guide follows the life of the structure from beginning to end: moving the asset in, funding it, running it, and keeping it compliant. Start anywhere.

Frequently asked questions