The 2020 National Budget tabled in Parliament on 26 February by Finance Minister, Tito Mboweni, held no surprises on any matters impacting the fiduciary industry. No changes were made to estate duty, donations tax or capital gains tax.
The fact that the standard deduction for estate duty (R3.5m) has not been increased again has the effect that the monetary relief of this deduction has been seriously eroded. It is more than ten years since this amount was last deducted.
Similarly, the year of death exclusion for CGT of R300 000 was not changed since March 2012. Read about the monetary impact in one of the Moneyweb articles next week.
On p132 of the Full Budget Review published by the National Treasury on 26 February is a paragraph about preference share schemes used to avoid the consequences of section 7C of the Income Tax Act, 58 of 1962 with regard to interest free loans to companies owned by trusts. The paragraph states that legislation to prevent this tax avoidance will be introduced.