Why foreign trusts bill warrants much closer scrutiny
There is concern over a proposal to change loan and company taxation laws
Proposals contained in a draft bill to change the tax treatment of foreign trusts held by South Africans are aggressive and should be reconsidered, says Andrew Wellsted, director at Norton Rose Fulbright. "The continued attack on trusts by the revenue authority is disappointing because they serve a useful commercial purpose and are not solely used as tax-avoidance structures," Wellsted said this week. Trusts could ring-fence assets owned by entrepreneurs so that creditors could not attach them or protect assets for children not old enough to manage their parents’ estates in the event of death, he said. Revenue authorities globally are scrutinising trusts, which are perceived as tax-avoidance vehicles. The Davis Tax Committee, an advisory panel to the Treasury chaired by Judge Dennis Davis, has proposed that the South African Revenue Service establish an investigations unit to examine foreign discretionary trusts. Johan van Zyl, partner and CEO in SA of international family office St...
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