n Tax Breaks Newsletter - New tax ruling presents a poser for trusts : estate planning
|Article Title||New tax ruling presents a poser for trusts : estate planning|
|© Publisher:||Moneyweb (Pty) Ltd|
|Journal||Tax Breaks Newsletter|
|Publication Date||Apr 2009|
|Pages||3 - 4|
Template wills and inexperienced drafters may result in trustees having to pay 20% capital gains tax on loan accounts due by trusts to deceased estates. A recent judgement in the Special Income Tax Court held that the drafting of a will with a clause bequeathing the residue of an estate to a particular trust amounted to the forgiveness of a debt, and thus gave rise to a capital gains event. As a result the trustees have to pay 20% CGT on the amount of the loan bequeathed to them.
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