Understanding Trusts: Key Insights from Business Sense and LEMS Experts

In this webinar, Angela Alderton from Business Sense, along with Brian and Alan from LEMS, delve into the complexities of trusts. They discuss the definition and nature of trusts, contrasting them with companies, and emphasize the contractual aspect involving founders, trustees, and beneficiaries. The conversation highlights the responsibilities and potential liabilities of trustees, stressing the importance of understanding these roles before accepting them.

The speakers explore the implications of having trusts in South Africa, especially when beneficiaries become non-residents, and the tax challenges that arise. They discuss recent changes allowing South African trusts to transfer assets to foreign trusts, providing a strategic option for those emigrating. The tax treatment of trusts, including the impact of distributing income to beneficiaries, is examined, with a focus on the complexities introduced by Section 7 of the Tax Act.

Charitable trusts receive special mention, with exemptions available under certain conditions. The discussion also touches on the process of closing a trust, the responsibilities of trustees, and the importance of maintaining compliance to avoid penalties. The speakers advise on when it might be beneficial to close a trust, particularly if the assets are not substantial enough to justify the administrative burden.

Throughout the session, the importance of a well-drafted trust deed is emphasized, as it dictates the operations and limitations of the trust. The session concludes with insights on the various types of trusts, such as family, charitable, and testamentary trusts, and the unique considerations for each. The overarching message is the necessity of careful management and regular review of trusts to ensure they serve their intended purpose effectively.

For more information contact

Alan Hockey: +27 (0)71 673 9937

Brian Payne: +27 (0)83-3091982

W: www.lemsystems.co.za