THE RISK OF SECTION 3(3)(d) OF THE ESTATE DUTY ACT WHAT IS A TESTAMENTARY RESERVATION IN A TRUST DEED? A testamentary reservation is a stipulation which is often found in trust deeds for especially family trusts in terms of which the founder or one of trustees will have the power to prescribe the distribution of [...]

WHAT IS CAPITAL GAINS TAX? Capital Gains Tax (“CGT”) is the portion of normal income tax attributable to the inclusion in your taxable income of a taxable capital gain. Simply put, CGT is a tax levied on profit from the sale of property or another asset held as a capital asset or an investment. The [...]

HOW TO MINIMIZE CAPITAL GAINS TAX USING THE FLOW-THROUGH PRINCIPLE, AND DOES YOUR TRUST PROVIDE FOR IT? AN INTRODUCTION TO CAPITAL GAINS TAX IN TRUSTS Since a trust is not a natural person, 80% of any capital gain arising from a disposal of an asset by the trust must be included in the trust’s taxable [...]

It has been more than a year since the Constitutional Court decriminalised the use of cannabis by an adult person in his or her private dwelling.  The effect of the Court’s ruling is twofold: It decriminalises the use or possession of cannabis by an adult in private, for that adult person’s personal consumption in private; [...]

INTRODUCTION Much has been said in the media about the use of community trusts as part of Broad-Based Black Economic Empowerment (“B-BBEE”) ownership schemes not complying with the law and therefore constituting fronting practices. This was largely as a result of comments made by the Commissioner of the Broad-Based Black Economic Empowerment Commission (“B-BBEE Commission”), [...]

Many private companies in South Africa, especially in the SME market, are traditionally owned and managed by the same individuals. With the increase in black ownership transactions as part of B-BBEE compliance initiatives by businesses, the share ownership structures of many of these private companies have now changed, raising the issue of shareholder participation in [...]

WINDING-UP OF SOLVENT AND INSOLVENT COMPANIES BACKGROUND Companies experiencing financial distress may not necessarily qualify for business rescue and must therefore resort to liquidation, which is also know as winding-up. A distinction must be drawn between the winding-up of a solvent and insolvent company. The winding-up of insolvent companies is governed by the provisions of [...]

The buzzword on many lips these days, following the Presidency’s announcement on 22 June 2020, is the Protection of Personal Information Act (Act No. 4 of 2013) (“the Act”), which more commonly goes by the somewhat catchy acronym “POPIA”, or “POPI” as it is sometimes referred to. The reason for the excitement is that South [...]

An alter-ego trust can be described, in simple terms, as a trust which is treated as an extension of one of the trustees, and therefore the trust assets are treated as the assets of the trustee in his or her personal capacity. If a trust can be regarded as an alter-ego trust, it can have [...]

WHAT IS AN ALTER-EGO TRUST? An alter-ego trust is when all the necessary requirements for a valid trust are present and the trust is established, but the trustees act as puppets, mainly under the instruction of the creator or another trustee.  It is also present when the trust property is treated by the creator or [...]