Overview

The 2018 Taxation Amendments have created an entirely new set of limitations when using local and offshore trusts for tax planning. In this seminar we will focus on these far-reaching changes and their impact.

A further amendment to section 7C, which causes an annual donation to arise from low- or interest-free loans to trusts and companies, has made the section more onerous for companies held by trusts. New rules in respect of debt waivers will ensure the tax-free annual reduction of loans to trusts by R100 000 is no longer possible. Detailed disclosure in the Income Tax Return for a Trust (ITR12T) and Income Tax Return for Individuals (ITR12) allows SARS to accurately assess the deduction, allocation and disclosure of expenses in the hands of the trust and beneficiaries of the trust.

The tax consequences of foreign dividends flowing into offshore trusts and back to South African tax residents have fundamentally changed and the impact of these changes on specific offshore tax structures must be understood.

In this seminar we will not revisit the basic taxation rules for trusts in great detail, but will look specifically at the application of those rules and amendments to them.

Course Content

Please join us as we take an in-depth look into the following issues:

• Section 7C
  • New amendment to section 7C and loans to companies held by trusts
  • New debt waiver rules and effect on R100 000 annual debt reduction
  • Brief reminder of sections 7 and 7C and potential double tax
  • Application of section 7C to beneficiary loan accounts and how to avoid this
  • Disclosure of loans in AFSs and effect on 7C
  • Estate planning in respect of 7C loans
• Offshore trusts
  • Amendments to section 25B(2A) and effect on taxation of foreign dividends
• ITR12T Trust return
  • Allocation and deduction of trust expenses
  • New disclosure required in trust AFSs
  • Disclosure linked directly to section 7C
• ITR12 Individual return of trust beneficiaries
  • Disclosure in respect of trust distributions
  • Deduction and disclosure of expenses incurred by the trust in respect of distributed amounts
  • Effect of beneficiary loan accounts
• Trustee resolutions
  • Wording of resolution and effect on application of section 7C to beneficiary loan accounts

Who should attend?

• Persons involved in financial advisory services, estate planning and real estate
• Tax specialists
• Tax practitioners involved in the submission of trust returns
• Practicing accountants and lawyers
• In-house tax managers and advisors
• Financial directors, managers and business owners
• Trustees and trust beneficiaries