What is the tax consequences when a RSA trust transfer a capital amount to the Namibia beneficiary trust?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
For purposes of the guidance that follows, we accept that the individual is someone who is ordinarily resident in Namibia, or a person who is deemed to be exclusively a resident of Namibia for purposes of the application of the agreement entered into between the governments of the RSA and Namibia for the avoidance of double taxation”. With respect to the trust we accept that its place of management is in the RSA.
We are not sure what you mean with ‘a capital amount’, but accept that the ‘transfer’ followed a decision by the trustees of the trust, acting in terms of their mandate, to vest the amount in the beneficiary.
If the amount is due to a capital gain (determined in respect of a disposal of an asset by a trust) in the year of assessment during which a trust beneficiary has a vested interest or acquires a vested interest (including an interest caused by the exercise of a discretion) in that capital gain but not in the asset, then the gain will not be disregarded in the trust where the beneficiary is not a resident of the RSA. That would be the case, based on the assumption above.