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Expats in South Africa facing ‘turmoil’ ahead of tax hikes

By International Adviser, 2 Feb 17

Wealthy expats living in South Africa are set to be hit hard by sweeping tax increases set to be announced in the country’s budget later this month.

Wealthy expats living in South Africa are set to be hit hard by sweeping tax increases set to be announced in the country’s budget later this month.

“They’ve hit trusts, but not as hard as we were expecting which is a bit of a relief,” said Schulze.

Under new rules, taxpayers can no longer sell assets into a trust or lend assets into a trust without charging interest on that loan.

If taxpayers fail to charge interest, that interest will be treated as a donation which will incur a 20% tax.

“Traditionally, the practice was used as an estate planning tool to peg the value of an estate by putting asset into the trust on loan accounts and that loan account would then remain at that level for the rest of your life,” said Schulze

“The assets would grow in the trust and as a result you would save a whole lot of estate duty on the growth of those assets.”

Pages: Page 1, Page 2

Tags: Budget | Wealth Tax

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International Adviser covers the global intermediary market that uses cross-border insurance, investments, banking and pension products on behalf of their high-net-worth clients. No news, articles or content may be reproduced in part or in full without express permission of International Adviser.