Treasury's plan to target trusts gains momentum - tax expert

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Cape Town - The Draft Taxation Laws Amendments Bill, issued by National Treasury last week, includes further changes that will curb the tax-free transfer of wealth to trusts through the use of a low interest or interest-free loan.

“It seems that National Treasury remains steadfast in limiting the transfer of wealth over generations without the payment of a form of wealth tax, be it estate duty or donations tax,” says Tertius Troost, tax consultant at Mazars.

Troost explains that Treasury’s proposed amendments to trust legislation, housed in Section 7C of the Income Tax Act, intend to stop a number of inventive methods taxpayers have found to avoid the additional donations tax payable in terms of Section 7C.

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