Should you put your business in a trust to save on estate taxes?
If your business is in a trust and its value grows over time, this growth is excluded from the estate duty calculation.
Despite this obvious benefit, the decision should not be taken lightly, as there are many other implications. Carefully consider the pros and cons before making a final decision.The legal structure of the business determines how it is dealt with in your estate. As a trust is unlikely to have the funds to buy the shares in the business outright, business owners typically make a loan to the trust equal to the value of the business when it is sold to the trust.
This makes decision-making more complex; while you will continue to manage the business as the managing director, decisions like when to sell shares will be made by independent trustees. If this interest exceeds the annual interest exemption, you will be taxed on this at your marginal tax rate. If the trust cannot pay this interest, the loan account will also grow and attract more interest.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Coega: Growing trust drives increased Chinese investment in EC special economic zoneCoega: Growing trust drives increased Chinese investment in EC special economic zone
Read more »
Coega: Growing trust drives increased Chinese investment in EC special economic zoneCoega: Growing trust drives increased Chinese investment in EC special economic zone
Read more »
Nigeria: Samoa Agreement - Nigerian Govt Threatens to Sue Daily TrustThe Nigerian govt says Daily Trust has a pattern of reporting falsehood against the government.
Read more »
'People don't have trust': New DA Beaufort West mayor promises services to troubled municipality'People don't have trust': New DA Beaufort West mayor promises services to troubled municipality
Read more »
Africa: Restoring Trust - Confronting Corruption and Championing Integrity58 percent of respondents to a worldwide survey believed that their political system has been captured by an elite that is corrupt, obsolete, and unreformable.
Read more »
BHI Trust: Family says Craig Warriner’s Ponzi destroyed themAll the jail time in the world will not make up for what Craig Warriner did to a Johannesburg family when he stole their money in a Ponzi scheme.
Read more »