Results 1 to 3 of 3

Thread: Capital gain distribution in trust

  1. #1
    Email problem
    Join Date
    Jul 2009
    Thanked 0 Times in 0 Posts

    Capital gain distribution in trust

    It is known that income generated within a trust keeps its form of origin (I think section 7), for example dividends distributed to beneficiaries stay dividends, interest stay interest and so on. The beneficiaries are then taxed in their personal capacities on the income received either as dividends (by the way exempted) or interest (exempted to an amount of R21 000).

    The question I now have is in the case of capital gains made by a trust. Normally 50% of the capital gain made by the trust is taxed at 40%, but what if the trust distribute the whole proceed to the beneficiaries, will it mean that the trust did not make the gain and that the individuals would pay capital gains on it, and

    If so is it the same as other capital gains for individuals, only 25% inclusion less exclusion of R17500, taxed at the individuals progressive tax rate at a max of 40%

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Durban, South Africa
    Thanked 2,585 Times in 2,180 Posts
    Blog Entries
    To the best of my knowledge, the same flow-through principle is available for capital gains just as with the other forms of income you have already covered.

  3. Thanks given for this post:

    QR Smith (11-Jul-09)

  4. #3
    Silver Member
    Join Date
    Jun 2008
    Thanked 76 Times in 56 Posts
    Correct. Also a trust can only distribute a CGT gain and not a CGT loss to the beneficiary

  5. Thank given for this post:

    Dave A (10-Jul-09), QR Smith (11-Jul-09)

Similar Threads

  1. I Need Capital
    By daveob in forum General Business Forum
    Replies: 0
    Last Post: 06-Apr-08, 03:07 PM
  2. Replies: 1
    Last Post: 22-Feb-08, 04:38 PM
  3. Declaration of trust assets
    By duncan drennan in forum General Business Forum
    Replies: 1
    Last Post: 05-Jun-07, 01:26 PM
  4. Trusts: can beneficiaries call the shots?
    By Sieg in forum General Business Forum
    Replies: 2
    Last Post: 31-Oct-06, 12:49 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts