A family trust can hold a wide range of assets, subject to the trust deed and any law that applies to the particular asset. Common examples include immovable property, listed and unlisted shares, unit trusts and exchange-traded funds, cash and money market investments, private company interests, intellectual property and valuable movable assets.

The fact that a trust can hold an asset does not mean it is always sensible to transfer that asset to the trust. Moving an existing asset into a trust may trigger tax and transaction costs. For example, an immovable property transfer can involve capital gains tax and transfer duty, unless VAT or a specific exemption applies. A transfer of shares can have capital gains tax and securities transfer tax consequences, while a donation can also attract donations tax.

The funding method is equally important. If the trust buys an asset from the founder on loan account, the loan remains an asset in the founder’s estate and section 7C may apply if the funding is interest-free or below the statutory official rate. The tax and estate planning effect should therefore be assessed asset by asset rather than assuming that trust ownership is automatically advantageous.

See also: How do I put my house in a trust in South Africa? | What is the minimum amount for a family trust?

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.