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Trusts and Deceased Estates

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Description

Overview

Trusts

In the first part of the seminar, Piet will share inside knowledge on the implications of the new section 7C of the Income Tax Act, including the proposed changes.

The taxation of the beneficiaries, who are either residents or non-residents of the RSA, on income or capital distributed by a trust will be unpacked. Piet will also cover the taxation of amounts vested by foreign trusts in RSA resident beneficiaries. To ensure we cover the practical issues, Piet will also discuss all changes to the income tax return for trusts (ITR12T) to be submitted by the trustees, as well as the information to be declared by the beneficiaries.

Deceased Estates

In the second part of the seminar, the new tax dispensation for estates of deceased persons will be covered. Piet will include the return of income by the deceased (until death) and thereafter. Emphasis will be placed on the treatment of trading stock and capital gains that arise on death and thereafter. The tax consequences of assets sold before the estate is wound up will also be covered, along with the tax return for section 18(3) estates.

With regard to retirement fund interests, Piet will also share his insights on the treatment of excess contributions to retirement funds and the tax consequences for the deceased or the heirs, where the heirs make an election with regard to the benefits.

Regarding surviving spouses, Piet will look at the disposal of assets before the estate is wound up, accrual claims and the R3.5 million deductions.


Course Content

    Trusts

    Section 7C:

  • The ‘connected person’ rules in relation to a trust
  • When has a person provided a loan, advance or credit to a trust?
  • The nature of an amount vested in a beneficiary, but not paid out
  • New developments:
    • Loans to a company that is a connected person in relation to the trust
    • Natural person acquires a claim to an amount owing by a trust or a company in respect of a loan, advance or credit
Taxation of trust beneficiaries who are residents in the RSA:
  • Income and capital gains (or assets) vested
  • Timing of distributions and supporting documents
  • Non-resident beneficiaries – income and capital gains (or assets) vested
Taxation of trust beneficiaries who are not residents in the RSA:
  • The tax consequences in the RSA of income and/or capital vested in RSA resident beneficiaries
  • Vesting of income or capital in trusts as beneficiaries (multiple trusts)
  • Primary residence in trust
ITR12T trust return:
  • What is new in the 2017 return?
  • New disclosure required in the return of the individual beneficiaries
  • Allocation of expenses
Estates of deceased persons

Normal tax issues:
  • The last return of income of the deceased. Capital gains and specifically where an asset bequeathed to a spouse is disposed of before the estate is wound up
  • The new tax regime for the taxation of income in the estate of a deceased person who died on or after 1 March 2016
  • When does the estate of the deceased person cease to be a taxpayer?
  • The taxation of lump sums:
    • Where election was made to transfer to another fund or withdrawn
    • Received post-death from an employer
Estate duty:
  • Property in the estate:
    • Excess contributions to funds
    • Contributions to foreign funds
  • The treatment of accrual claims
  • The section 4A deduction:
    • New relevant material requirements
    • First dying spouse not resident in the RSA at time of death
  • Section 18(3) estates
  • The last return of income (ITR12) of the estate of the deceased person

Presenter

Piet Nel CA(SA)

Piet Nel is the head of the recently established School of Applied Tax at SAIT's wholly-owned TaxFaculty.

Prior to joining The Tax Faculty, Piet was the project director for tax at SAICA. Over a period of more than a decade, he presented numerous tax seminars and workshops to tax practitioners across the country. He formerly lectured in taxation at Unisa and the University of Pretoria and acted as study supervisor at postgraduate level.

Piet actively contributes to the tax thought in South Africa by regularly appearing on radio and TV talk shows, and by publishing articles in professional journals and magazines.


 

 

 

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