Page 40 - Robin Twaddle PTG 2017 Digital

TRUSTS

TAX RATES
Tax rates applicable to trusts are as follows:

TYPE OF TRUST INCOME TAX RATES CAPITAL GAINS TAX
INCLUSION RATE
Normal Trust 45%
Special Trust 80%
Same as those applicable to natural
persons, except that the rebates and 40%
interest exemptions do not apply.

Note: A special trust is a trust created solely for the benefit of someone who suffers from
a disability that prevents such person from earning sufficient income for their maintenance
or from managing their own financial affairs. A special trust can also be created by way
of a testamentary trust whereby relatives of the testator who are alive on the date of
death are the beneficiaries. In order to qualify as a special trust, the youngest of the
beneficiaries must, on the last day of the year of assessment of that trust, be under the age
of 18 years.

INTEREST-FREE AND LOW-INTEREST LOANS TO A TRUST

With effect 1 March 2017 loans made to a trust by
◆◆ a natural person, or
◆◆ at the instance of that person, a company in relation to which that person is a

connected person, and where that person or company is a connected person in relation
to the trust

the difference between the amount of interest incurred by the trust (if any,
otherwise nil) and the interest that would have been incurred by that trust at
the official rate of interest will be a continuing, annual donation for purposes of
donations tax, made by the lender on the last day of the year of assessment
of the trust

37