How and when can movable and immovable assets be transferred to your trust?

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While many people understand the necessity of a trust to protect and grow their wealth, it is not always clear to them when and how assets are transferred to their trust.

On registration of a trust, the Master of the High Court confirms, in writing, the appointment of the trustees by issuing the Letter of Authority. This states the name and IT number of the trust as well as the name, surname and ID number of each trustee. Once the Letter of Authority is received, the trustees have the authority to act on behalf of the trust and are able to start to transact on behalf of the trust.

The first action the trustees should take after the Letter of Authority is received is to open a bank account and to register the trust for income tax with SARS. Once the bank account and income tax registration is done it is time to start using the trust – to transfer the fully paid-up, movable assets currently held in the trustee’s capacity into the trust, to divest the trustee of ownership. This will protect the assets from potential creditors as well as ensure that the assets will no longer form part of the estate of the trustee. Movable assets can be sold or donated to the trust. The value of assets or cash that may be donated, tax-free, is currently R100 000 per person, per year.turn-on-3020730_1920

The trust at the date of inception does not possess any money to reimburse the seller, who is a trustee of the trust. Therefore, on the sale or transfer of the assets, the initial assets valued at R100 000 will be donated and thereafter a loan account will be created in favour of the seller to the value of the assets transferred. A deed of sale will be drafted and signed to record the transfer of the assets and a loan agreement will be drafted and signed to record the loan account. The loan account is then reduced by the subsequent yearly donations of R100 000. The management and paying-off of the loan account should be closely monitored and seen as a priority, as the loan account forms part of your personal estate.

The cost to transfer assets depends on the type of asset. Movable property such as household contents can be transferred at no cost. The value at which you transfer them will be a second-hand value and not the replacement value. With assets such as paid-up vehicles and the like, it is advisable to have these registered in the name of the trust, which will cost the same as it would to transfer the ownership of the car to another person.

It is imperative that the transfer of these assets occur as soon as possible after registration of the trust. In terms of the Insolvency Act, any transaction that has occurred within six months (twenty-four months if it can be proved that you were factually insolvent at the time of transfer) of an individual being declared insolvent may be reversed. Therefore, to avoid the risk of your assets reverting back to your name and therefore being attachable by your creditors, they need to be transferred immediately. Once the six months have passed from the date of transfer, the assets are then secure.

It is a bit more complicated to transfer immovable property as the property will be sold to the trust at fair market value, and, depending on the method used to transfer the property, there are different costs involved. These include attorney and bond costs, possible transfer duty and possible capital gains tax.

Before transferring immovable property to your trust it is advisable to speak to your property strategist to determine the best way to do so, taking into consideration the costs and your affordability.

To discuss creating a trust or the transfer of assets to an existing trust, contact Trustfocus to arrange a free consultation with one of our skilled consultants:


CAPE TOWN – 021 979 2501

PRETORIA – 012 943 0201

DURBAN – 031 110 0817

Daniel Coetsee

Daniel Coetsee

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