Trusts can be a valuable tool for estate planning, especially when it comes to taking care of minor dependents. They have also historically conferred a number of tax-planning advantages, but these have however been gradually eroded in recent years.
Wealth normally buys expert tax planning. But not in the case of the taxpayer in ITC 1840 (2009) 72 SATC 79 where the monumental blunders of the tax advisers cost the trust nearly R80 million in donations tax−which could have been totally and legitimately avoided by the addition of a few words to the trust deed, and by a few expeditious decisions when flaws in the tax plan came to light.
The recently promulgated Taxation Laws Amendment Act of 2010 contains a provision that will see taxpayers claiming deductions for the next 20 years and more in terms of a provision that no longer exists. The provision in question is Section 11(g).