Lately, many new property investors have come to us to fix a huge problem.

They attended presentations or consultations where they were advised to buy houses in shelf companies, because trusts take too long to register, while a shelf company can operate immediately. Then, later, when the trust is ready, they are told they can transfer the shares to the trust. This is VERY WRONG because it means you’ll pay transfer duty and costs twice.

Let’s look at the reasons why you should NOT DO THIS:

1. Profit and capital gain in a company is always taxable, but in a TTS Trust it is tax-free.

2. The only ways to get money out of a company for personal expenses and living costs are by way of a salary, a dividend, a loan, or a fringe benefit. All of these are heavily taxed. In contrast, with a TTS Trust, all distributions to beneficiaries are tax-free.

3. In a company, the directors and shareholders are always responsible for the debt of the company, regardless of whether they signed surety or not. In a TTS Trust, trustees are only responsible for debt on which they personally signed surety.

4. Companies are regulated by the CIPC, a government-controlled organisation. TTS Trusts are regulated by the Master of the High Court, a judiciary-controlled entity. The judiciary is independent from government.

5. Property expropriation, with or without compensation, can be done with personally or company-owned property without the owner’s consent. But with a trust, it can only happen if all the trustees agree to it.

6. Company laws can be changed by government whenever they want, but trust laws can only be changed by the judiciary and thanks to the power of the Ingonyama Trust of Zululand, it’s very unlikely to ever happen! (The Ingonyama Trust is the biggest property trust in South Africa.)

7. Companies are not allowed to make losses year after year, but trusts can accumulate losses indefinitely. Creating bank-financed, cost-free losses through refinancing in a trust is one of our top tax-saving and property-multiplier strategies.

CALL TO ACTION

If you own property in a company, move it to a TTS Trust AS SOON AS POSSIBLE. The longer you wait, the more the property value grows and the higher the transfer costs will be!

By the way, trust registration through Treasury Trust Services (TTS), SA’s biggest independent trust company, currently takes only 15 to 30 days from lodging with the Master of the High Court.

I discuss these issues in more detail at my seminars. Be sure not to miss it.

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Regards,
Coert Coetzee
Founder of the famous Wealth Mastery System (Est. 1996)

P.S. For any service related matters, questions, queries or complaints regarding Wealth Masters Club, Destinata or Treasury Trust Services, please contact our service department on [email protected]