Foreign Trust Purchasing Immovable Property in South Africa
In terms of the Trust Property Control Act, where a person who has been validly appointed outside South Africa as a trustee of a trust registered in a foreign jurisdiction wishes to transact in respect of assets within South Africa, the provisions of this Act apply and he cannot transact until he has been authorised by the Master of the High Court to do so by means of Letters of Authority issued in his favour.
To apply for such Letters of Authority, the trustee would need to lodge with the Master a notarially certified copy of the foreign trust’s deed as well as certain other documentation, one of which may be the provision of security. Unless security is given, the foreign trust will be obliged to provide a domicilium in South Africa acceptable to the Master; this usually dictates that the trustees must use the services of a professional trust administrator in South Africa and whose address will then be the domicilium of the foreign trust. Once the Master has issued the Letters of Authority in favour of the foreign trustees, all the same principles outlined above will need to be considered to ensure the validity of a transaction.
Remember too that from a CGT and withholding tax point of view, such a trust is deemed a non-resident.
Contact STBB should you have further enquiries.