An “ownership trust”, the founder or settlor transfers ownership of assets or property to a trustee(s) (in a fiduciary capacity) to be held for the benefit of defined or determinable beneficiaries of the trust.
A “bewind trust”, the founder or settlor transfers ownership of assets or property to beneficiaries of the trust, but control over the assets or property, is given to the trustee(s).
An “inter vivostrust” is created during the lifetime of a person by way of an agreement (contract) between the founder and the trustee(s).
A “testamentary trust” is set up in terms of the will of a person and comes into effect after their death.
A “vesting trust” – trusts where income, capital gains or assets are vested to a beneficiary in terms of the trust instrument.
A “discretionary trust” – a trust where the trustee(s) in terms of the trust instrument, has the right to vest income, capital gains, assets or retained amounts in that trust, to its beneficiaries.
A “hybrid trust” – the majority of trusts in South Africa will have vested and contingent rights provided for in the trust instrument. In other words, a combination of the vesting trust and the discretionary trust mentioned above.
Specific application trusts – trusts may be classified as a type of trust based on the application of the trust, e.g.:
Trading (Business) trusts
Asset-protection or realisation trusts
Charitable trusts
Land rehabilitation trusts
Share incentive scheme trusts
BEE trusts
Collective investment scheme (CIS) trusts
Special trusts:
For tax purposes the following types of special trusts are recognised:
Special Trust Type A – a trust created solely for the benefit of a person(s) with a mental or physical “disability” as defined in section 6B(1) .
Special Trust Type B – a trust created solely for the benefit of a person(s) who is a relative of the person who died and who are alive on the date of death of that deceased person (including those conceived but not yet born), and the youngest of the beneficiaries is younger than 18 years on the last day of the year of assessment.
