On 8th July 2016, the National Treasury and the South African Revenue Service (SARS) published for public comment the final two bills to give effect to the tax proposals announced by the Minister in the 2016 Budget.
The Standing Committee of Finance will convene public hearings in the second half of August 2016 on these draft bills before their formal introduction in parliament.
Included in the draft bills are proposals to prevent tax avoidance through the use of trusts.
Interest free loans or loans with interest below-market rates made directly or indirectly to a trust by a natural person, or by a company that is a connected person in relation to that person will be regulated as follows:
The proposed amendments will come into effect on 1 March 2017 and will apply in respect of years of assessment ending after that date.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)