Legal Speak Made Easy - “Dormant Trust”
You will see and hear the phrase “dormant trust” bandied about a lot, normally in relation to what ongoing duties the trustees of non-active trusts do and don’t have.
Be warned that SARS says that there is no such legal concept as a “dormant trust” and that even economically inactive trusts (which SARS calls “passive trusts”) must be registered for tax, and must render annual tax and other returns, all under pain of stringent penalties for both non-compliant trusts and for their trustees personally. There is a small concession to inactive trusts in that their tax returns are “shortened” and “simplified”.
Bottom line? No trusts are “dormant”, and none are exempted from ongoing tax and other compliance duties.
Provided by Anthony Whatmore and Company
© DotNews. All Rights Reserved.
Disclaimer
The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for professional, detailed and appropriate advice.
