The Trading Trust

by Cassie Henning


Trading Trust

If you are a Wealth Masters Club member, you must have heard about a “Trading Trust” by now, especially in the context of cash flow projects like gold investments and crypto-mining. But what is it? How is it used? In this article, Cassie Henning explains the basics of this important tax saving vehicle.

In the Wealth Mastery System, we learn to split or separate our risk. This is done by means of Family-, Property-, Residence- and Share trusts. But as the world changes, the trusts must also keep up.

The new kid on the block is the Trading trust.  What is a Trading trust?  How do I use a Trading trust?

The Trading trust is a very lucrative tax vehicle that can help with a tax saving up to 45%. However, this trust must be in the right place at the right time. The question still remains, what to do with a Trading trust?  The Trading trust is a cash flow machine that will assist the trustees to generate cash flow to buy more properties.

With the help of Gold and Crypto's, one can achieve the passive income that will allow you to maintain the shortfalls in the trust and make bigger deposits into your property portfolio. The Trading trust is a cash projects trust.  This trust will be the owner of all the cash projects you might have, projects like Karatbars, Bitclub, Lifestyle Galaxy, just to name a few.

With the financial year end just around the corner on 28 February 2019, we found that not many people know exactly what to do with the tax related to these cash flow projects. Well, Destinata Accounting can help.  Different projects are taxed in different ways, and it is important for you to keep record of all transactions and statements. PLEASE REMEMBER to save all transactions, balances and amounts invested into these projects for the 28 February year-end, as your accountant will need it to draft your financial statements.

Your accountant can then assist you with your tax matters, even if it is in your personal name.  Please also bear in mind that if you are trading in your personal name, you will have no tax saving and will be taxed according to your individual SARS tax bracket for the year.

The importance of the Trading trust is sometimes underestimated.  When it comes to tax saving, a trust is the only legal entity that can assist in this matter.  If the trust is in place (and correctly so), your accountant will make use of the conduit principal to plan your tax and get the most out of your unique tax situation.

Here are 6 things that must be in place before your Trading trust can be fully operational:

  1. The trust must be registered at the Master's Office.

  2. A bank account for the trust must be opened.

  3. The Trust must be registered at SARS for an income tax number.

  4. The RESOLUTION must be correctly drafted. This is the most important resolution of all, without this resolution you will not be able to trade out of the trust.  This special trading trust resolution will give you the right as trustee or beneficiary to act on behalf of the trust to trade in cash projects. This should be obtained from your Independent Trustee or Protector.

  5. Your trading platform (e.g. Altcoin Trader) must contain the trust bank account details.

  6. Your last will and testament will have to be reviewed and certain aspects will have to change. Your Independent Trustee or Protector can assist with this.

When all of the above is in place, there is no reason to worry. With the Wealth Mastery System you will always have peace of mind that your taxes and estate duties are under control.

If you don't have a Trading trust in place, please contact services@wealthmastersclub.com to book your appointment with the Wealth Master Coach. 

 


Budget 2019/2020 Commentary
by Johannes Maree, CEO of the Destinata Group of Companies

by Johannes Maree, CEO of the Destinata Group of Companies

Finance Minister Tito Mboweni delivered his budget speech on 20 February – and I, for one, am very impressed – there were absolutely no surprises.  He pointed out that SARS needs to focus on collections effectiveness as opposed to major tax hikes.

There were no material changes from last year.  In summary:

ITEM

NOW (2019-2020)

WAS (2018-2019)

Income Tax – Individuals

Scale unchanged – see below
Top bracket:  45%

Scale unchanged
Top bracket:  45%

Income Tax – Companies

28%

28%

Income Tax – Trusts

45%

45%

VAT

15%

15%

Dividends Tax

20%

20%

Estate Duty (1st R30M)

20%

20%

Estate Duty (portion over R30M)

25%

25%

Capital Gains Inclusion Rate in Taxable Income – Individuals

40%

40%

Capital Gains Inclusion Rate in Taxable Income - Companies & Trusts

80%

80%

Transfer Duty

Scale unchanged, see below – no duty on transactions up to R900 000

Scale unchanged

TABLE 1 – INDIVIDUALS AND SPECIAL TRUSTS

Taxable Income (R)

Rate of tax

R0 – R195 850

18% of taxable income

R195 851 – R305 850

35 253 + 26% of taxable income above R195 850

R305 851 – R423 300

63 853 + 31% of taxable income above R305 850

R423 301 – R555 600

100 263 + 36% of taxable income above R423 300

R555 601 – R708 310

147 891 + 39% of taxable income above R555 600

R708 311 – R1 500 000

207 448 + 41% of taxable income above R708 310

R1 500 001 and above

532 041 + 45% of taxable income above R1 500 000

TABLE 2 – TRANSFER DUTY RATES

Value of property (R)

Rate of tax

R0 – R900 000

0%

R900 001 – R1 250 000

3% on the value above R900 000 and up to R1 250 000

R1 250 001 – R1 750 000

R10 500 + 6% on the value above R1 250 000 and up to R1 750 000

R1 750 001 – R2 250 000

R40 500 + 8% on the value above R1 750 000 and up to R2 250 000

R2 250 001 – R10 000 000

R80 500 + 11% on the value above R2 250 000 and up to R10 000 000

R10 000 001 and above

R933 000 + 13% on the value above R10 000 000

Should you wish to consult with our experts on how to best manage the new budget developments and its impact on your affairs, please contact services@wealthmastersclub.com  

IMPORTANT REMINDER

There are only 7 days left in the 2019 tax year, ending 28 February 2019.  If you are paying a considerable amount of tax, Section 12J should be an investment that you are considering.

By investing in a Section 12J company you can claim back up to 100% of income tax which you have already paid and / or reduce your capital gains tax payable to zero if you invest before 28 February 2019. 

If you would like to know more click the link https://www.destinataholdings.com/section-12j-investment/

It's done in 4 easy steps:

  1. Fill in the application (which you can access via the link).

  2. Send the completed form to us at info@destinataholdings.com

  3. Make payment as per instructions on application.

  4. Claim the tax deduction on your tax assessment.

The contents of this email should not be construed as investment, tax, legal, accounting and/or other advice. For advice on these matters consult your preferred adviser.  Destinata Capital Ltd (VCC-0073 FSP 48729) is an authorised financial services provider and is a SARS approved Venture Capital Company.




 
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