Tax changes affecting Trusts: Interest-free or low-interest loans to trusts
The South African National Treasury (“Treasury”) is moving forwards with their promises to tighten up the income tax laws which are applicable to trusts. In July 2016, Treasury released the Draft Taxation Laws Amendment Bill (“Draft TLAB”) which introduced a new section 7C into the Income Tax Act, 1962 which applies directly to trusts which are used as investment vehicles. Trusts - the structure Trusts are often used as an investment vehicle to hold immovable property. There are a number of benefits to this, including, removing the property from your estate beyond the reach of creditors and reducing your estate’s…