New Income Tax Act amendment closes foreign trust low-interest interest-free loan

New Income Tax Act amendment closes foreign trust low-interest interest-free loan
Podcast
New Income Tax Act amendment closes foreign trust low-interest interest-free loan
Podcast
Mariska explains that a key focus of the Income Tax Act is to protect South Africa’s tax base by preventing impermissible tax avoidance. Previously, low or interest-free loans to connected foreign trusts could escape donations tax under Section 7C if they fell under Section 31’s transfer pricing rules. The amendment closes this gap, ensuring any interest shortfall is treated as a deemed donation, now subject to donations tax.
Mariska explains how these changes impact taxpayers and estate planning strategies.
Click here to listen to the interview.
The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2025 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.
Subscribe
We support our clients’ strategic and operational needs by offering innovative, integrated and high quality thought leadership. To stay up to date on the latest legal developments that may potentially impact your business, subscribe to our alerts, seminar and webinar invitations.
Subscribe