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Taxation of trusts for disabled persons: Namibia vs South Africa

Tuesday, 04 March 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

The answer to this query is based on legislation as at 2014/03/04.

Q: With regards to taxes what is the best place to have a trust for a disabled person, South Africa or Namibia?


A: I am not in a position provide any guidance with regards to the tax implications from a Namibian perspective.

From a domestic tax law perspective may the trust qualify as a "special trust” which would mean that preferential tax rates may apply. The trust will be taxed the same as an natural person and not at a flat rate of 40%.Special trust means a trust created-a)solely for the benefit of one or more persons who is or are persons with a disability as defined in section 18(3) where such disability incapacitates such person or persons from earning sufficient income for their maintenance, or from managing their own financial affairs:

Provided that- aa)such trust shall be deemed not to be a special trust in respect of years of assessment ending on or after the date on which all such persons are deceased; and

bb)where such trust is created for the benefit of more than one person, all persons for whose benefit the trust is created must be relatives in relation to each other; or

b)by or in terms of the will of a deceased person, solely for the benefit of beneficiaries who are relatives in relation to that deceased person and who are alive on the date of death of that deceased person (including any beneficiary who has been conceived but not yet born on that date), where the youngest of those beneficiaries is on the last day of the year of assessment of that trust under the age of 18 years; 



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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