Interest-free loans to a trusts explain - Section 7C interest-free loans

In 2016, the Income Tax Act was amended to address the perceived avoidance of donations tax on the sale of an asset or on advancing loan funding to a trust. It was subsequently further extended to include loans made to certain companies and claims acquired to loans. In 2018, the rates of donations tax and estate duty were increased where the value exceeds R30 million. This webinar covers the avoidance provision (section 7C of the Income Tax Act) and the donation that is deemed to arise in this regard.

Another reason for the introduction of section 7C was that estate duty could be avoided through the reduction or waiver of the asset base of the lender in respect of the loan capital. The webinar also covers the tax consequences of debt benefits in the context of trust and also where section 7C applies.

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