The Transfer Duty (Amendment) Act 2019 and the Trust Property Control (Amendment) Act 2019 will enable families to set up Trusts in an affordable and a more regulated environment. This article will explain how RSM Botswana will lead you in the Creation, Growth and Protection of your legacy through a sound, robust and compliant estate plan in this new trust era.
Transfer Duty (Amendment) Act of 2019
Our clients and prospective clients have more often than not, raised concerns about the payment of transfer duty when transferring properties into a family trust, and most have held back from setting up a trust. The amended act exempts payment of transfer duty when an immovable property is transferred into a family trust, a trust in which the beneficiaries are blood relatives and/or the spouse or into a family trust. This will enable families to set up trusts without having to pay transfer duty upon “donations of immovable property to eligible beneficiaries as provided for under the Income Tax Act”. A Trust is one of the eligible beneficiaries in the Income Tax Act. RSM will apply for the required exemption from paying transfer duty.
Trust Property Control (amendment) Act of 2019
Trust Property Control Act requires trusts and founders to engage professional trustees who are regulated by and registered with the Master of the High Court. As your independent and professional trustee, RSM provides you with trust registration, administration and consulting services in line with Botswana trust legislation. RSM will keep the following records for your trust:-
- Secretarial records including keeping of trust instruments, property title deeds, identity documents of the trustees and beneficiaries and minutes of trustee meetings that deal with trust transactions, trustee appointments, resignations, books of account, income distribution, beneficiaries appointment, designation and changes.
- Trust asset register
- Trust books of accounts, financial statements including investment records and trustee remuneration records.
- Trust tax returns and returns for trustees and beneficiaries as instructed
- Other matters of reporting to the Master of the High Court
Trust Property Control Act amendments in 2019 only go to strengthen the trust Legislation. You may note the following amendments:-
- Master of the high court now includes other designations such as Deputy Master. The purpose is the allow delegation and decentralisation to ease Court administration relating to trusts.
- The definition of trust is changed to exclude trusts dealt with by other Acts such as curatorships but to include foundations and trust arrangements made not only to protect assets and income distribution but also to assist in succession planning.
- Master Trust Registry is now a public office and documents registered are now open to public inspection.
- Beneficial owner now means the ultimate natural person acting unilaterally or with other natural persons.
- Every trustee is now responsible for books, tax, keeping ID documents, relationship documents, etc.
- Minister is now authorized to make further regulations to prescribe additional forms, the manner in which they will be filed with the Master and also to specify the document retention period.
- Master has powers to request in writing for additional information from the trustees.
Trust instruments made prior to June 2018 may now be registered with the Master. In other words the transition period is extended to 31st December 2020. Please write to [email protected] for any further information or clarifications.