South Africa

Treatment of trusts

The tax rate on the taxable income of a trust other than a special trust (special trusts being trusts created for the benefit of mentally or physically handicapped individuals and trusts created in terms of a will for the benefit of minor children that are relatives of the deceased) is 45%. Trusts do not qualify for the tax rebates referred to above. Special trusts are taxed at the rates used for individuals.

A trust that has been approved as a public benefit organisation is exempt from tax, unless it earns trading income in which case it would pay tax at a rate of 27% on its trading income.

Capital gains are included in a trust's taxable income at a rate of 40% for special trusts and 80% for all other trusts.

Trusts are effectively tax transparent for the most part where the income of the trust vests in a beneficiary in the same tax year.

Treatment of partnerships

Partnerships are treated as tax transparent with the partners being taxed on the income of the partnership and being entitled to any deductions that the partnership would have been entitled to in accordance with the profit-sharing ratio.