The Biggest Trust Tax Myth: Trusts Don't Save Tax. You, as a Tax Practitioner Do.
Most clients think a family trust automatically saves tax. It doesn't. Without the right trustee resolutions, correct timing and proper planning, a trust can end up paying a flat 45% tax instead. This article explains the three rules every accountant needs to master, the conduit principle, Section 7C and capital gains tax, and shows how a few simple decisions can save clients thousands while keeping them on the right side of SARS.
A Taxman’s Casebook Asset for share deals – Double tax disguised as a tax dispensation
Section 42 looks like a gift, defer tax, swap assets for shares, keep the deal moving. But the buyer quietly inherits the seller's full tax liability, the same gain gets taxed twice, and disposing of assets within 18 months triggers anti-avoidance rules that SARS's own return can't even capture. Lesson: get the base cost in writing. Allocate assets correctly. Know the difference between a tax deferral and a tax trap, because your clients are counting on you to.