|Since the recent changes in the law negating the tax advantages on property sold through trusts and closed corporations, the popularity of these as holding vessels for property has declined rapidly, says Lanice Steward, MD of Cape Town-based estate agency Anne Porter Knight Frank – and she warns, anyone buying or selling through a trust should be conscious of the difficulties this can involve. |
“A recent court case at the Cape has shown that no property transaction involving a trust or a closed corporation is valid unless either all the trustees or members have signed or those who are not doing so have signed an agreement delegating their authority to another trustee or member.”
It is, said Steward, possible to go all the way along the negotiation trail and then find that the non-compliance of one trustee prevents the deal being finalised.
“In the next two years we will see fewer property deals being conducted through trusts or closed corporations. In the meantime, agents and others should be warned that all their effort can be nullified by one trustee or member refusing to play along, even if he or she is outvoted by the others.
“It is important, therefore, to get the agreement of all necessary signatories at the outset – and then remain aware that one could still change his mind