Die koop-en-verkoopooreenkoms gefinansier deur 'n polis as boedelbeplanningsinstrument
Combrink, Richard Walter
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There are real uncertainty about the interpretation of section 3(3)(a)(1A) of the Estate Duty Act when the buy-and-sell agreement comes to mind. The uncertainty started with the definition of "person" in the Estate Duty Act, because the trust was not so commonly used at the time when the act came into force. Unfortunately the trust doesn't fall under the definition of "person" and therefore cannot qualify for the estate duty benefit. The big question arises whether the insured life can qualify for the estate duty benefit if the interest of the company is situated in 'n inter vivos trust. According to Magnum Financial Holdings (Pty) Ltd) (in Liquidation) v Summerly and Another NNO 1984 1 SA 160 (W) the court decided that the trust should be recognised as a "debtor" for all practical purposes. The trustees are authorised to conclude transactions on behalf of the trust. That means that the trust are managed by the trustees and that the trust cannot exist without the trustees. The trustees have a key-person position in the trust. My conclusion is that for the sake of section 3(3)(a)(1A) of the Estate Duty Act the inter vivos trust should be recognised as a person. In that case all the requirements of the section will be satisfied, and if the insured life was a trustee of the trust, he/she should enjoy the estate duty benefit. There are two solutions to the problem we face. Either the definition of "trust" or "person" should be amended in the Estate Duty Act. The definition of "trust" should include a trust as a person and the definition of "person" should include a person as a trust. That way the trust and section 3(3)(a)(1A) of the Estate Duty Act can be reconciled.
- ETD@PUK