South African beneficiaries of foreign trusts who receive distributions from those trusts are, in most cases, liable to tax in respect of such distributions. The anti-avoidance measures in section 25B and paragraph 80 of the Eighth Schedule to the Act also specifically provide for distributions out of trust capital to SA beneficiaries to beneficiaries to be taxable in certain instances. Applying these anti-avoidance measures require of taxpayers to deemed the foreign trust a resident of South Africa and then establishing if the trust would have paid tax in SA on the receipts that created the capital from which the distribution is made.

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