The South African Draft Taxation Laws Amendment Bill, 2018 (the “Draft Bill”), which was published by the Minister of Finance on 16 July 2018, introduces many of the tax proposals announced in the 2018 Budget Review earlier this year.
Consistent with the general trend of combating perceived areas of tax avoidance, among the tax changes contained in the Draft Bill are proposed amendments to the provisions in the Income Tax Act, 1962 (the “Act”) dealing with foreign trusts that hold the majority of the shares in an underlying foreign company.
Authored by Jenny Klein and Sheryl Kunaka
The proposed amendments are in draft and are subject to change. The due date for comments from the public is 16 August 2018. However, given the potentially adverse tax effects for South African resident individuals with interests in foreign trusts, the impact of the proposed changes should be carefully considered before the expected effective date of 1 March 2019.