Transferring a property into a family trust in South Africa involves several costs that need to be considered. These expenses are essential to understand as they play a significant role in the financial aspects of the transfer process.

In South Africa, family trusts are taxed at a flat rate of 45% on income generated during a tax year. When assets are transferred into a family trust, donations tax may be applicable if the transfer is deemed a donation. Donations tax is currently set at a rate of 20% and is levied on the value of the asset transferred. However, certain exemptions and thresholds exist, such as the annual donations tax exemption of ZAR 100,000 per person.

A family trust can provide continuity and stability by ensuring that the property remains within the family for future generations.

Every trust in South Africa has to register as a taxpayer in terms of the Income Tax Act. In terms of the recent amendments, the South African Revenue Service (SARS) is one of the entities given access to the Master’s portal.

A family trust can provide a level of protection for your assets. By transferring assets to the trust, they are no longer personally owned, which may offer some protection from creditors, potential lawsuits, or other financial risks.