South African trusts can be classified in several different ways, depending on their legal structure, how they were created, the rights of their beneficiaries and their tax treatment.
In its current Comprehensive Guide to the Income Tax Return for Trusts, SARS describes three types: an ownership trust, where trustees hold the trust property for beneficiaries; a bewind trust, where beneficiaries hold ownership but trustees administer or control the property; and a curatorship trust, where property is administered for a beneficiary who lacks capacity to manage it.
Trusts can also be classified by how they are created. The Master of the High Court distinguishes between inter vivos trusts, created during a person’s lifetime, and testamentary trusts, created under a will after death. Trusts may further be discretionary or vesting, and SARS recognises qualifying Special Type A and Special Type B trusts for tax purposes. These classifications can overlap, so one trust may fall into several categories at the same time.
See also: What is the opposite of an inter vivos trust? | What type of trust is best for a family?
Disclaimer: The information provided here is intended as general guidance only and does not constitute legal, tax, or financial advice. Every situation is unique, and legislation is subject to change. We invite you to reach out to our team at Wealth and Legacy Group for guidance tailored to your specific circumstances.