Trust funds

Amendments and Provisions: 

Income Tax Exemptions Removed:

• The Bill proposes to delete the income tax exemption for the income or principal sum of a registered family trust. Previously, these amounts were exempt from income tax, but the new proposal aims to tax them​​​​.

• The same applies to income from the National Housing Development Fund and capital gains relating to the transfer of title of immovable property to a family trust​​​​. 

Committee Recommendations:

• The Departmental Committee on Finance and National Planning recommended retaining the existing exemptions for family trusts. They argued that taxing family trusts undermines the primary purpose of creating trusts, which is to protect and preserve assets. 

• The introduction of such taxes could lead to the creation of offshore trusts, which is not ideal as it may result in wealth being held outside the country 

• The Committee also noted that registered trust schemes serve a similar purpose to pension schemes and should not be discriminated against. These trusts play a crucial role in providing stability and security to vulnerable beneficiaries across generations​​.