🏡 Setting Up a Family Trust in 2025: Still Worth It?

In recent years, the South African Revenue Service (SARS) has tightened its grip on trusts — from expanded reporting obligations to restrictions on interest-free loans. Yet despite the changing landscape, family trusts remain a powerful tool for protecting wealth, ensuring generational planning, and managing tax exposure — if structured correctly.

So, is setting up a family trust in 2025 still worth it? Let’s break it down.

✅ The Key Benefits of a Family Trust

1. Asset Protection A trust can protect family assets from creditors, business risks, and even divorce — especially if you operate in a high-liability profession like medicine or law.
   

2. Estate Planning Efficiency When assets are held in a trust, there’s no need to transfer ownership on death. This can reduce estate duty exposure and avoid delays in estate administration.
   

3. Wealth Preservation for Future Generations With careful structuring, a trust can ensure assets benefit children or grandchildren, while avoiding reckless spending or external claims.
   

4. Potential Tax Flexibility Proper income-splitting among beneficiaries can, in some cases, result in lower effective tax rates — particularly when distributing income to individuals in lower tax brackets.

⚠️ But Here's the Catch in 2025…

Recent regulatory changes mean that trusts are under much closer scrutiny:

• Section 7C of the Income Tax Act now taxes interest-free or low-interest loans to trusts — which were a common way of funding them.

• Trusts are taxed at a flat rate of 45%, unless income is distributed to beneficiaries, in which case it is taxed in their hands.

• Administrative burden: Annual financials, tax returns, and CIPC (if applicable) obligations require professional oversight.

• Disclosure rules: Trusts must now report beneficial ownership to the Master of the High Court and sometimes to SARS.

Bottom line? Trusts are no longer “set and forget” vehicles.

🧠 When Is a Trust Still a Good Idea?

• You have a growing estate or multiple properties you want to ring-fence from personal risk.

• You want to plan for children, dependents with disabilities, or future generations.

• You’re looking to build a long-term intergenerational wealth structure.

• You want to ensure your estate avoids fragmentation, disputes, or delays in transfer.

With the right guidance, a trust can still offer strategic advantages — but cookie-cutter setups no longer cut it.

💼 How Horizon Trading Solutions Can Help

At Horizon Trading Solutions, we offer a comprehensive trust service that includes:

• Trust formation and registration

• Beneficial ownership reporting compliance

• Annual financial statement preparation

• Trust income tax return filing (ITR12T)

• Strategic advice on funding, distributions, and succession planning

We’ll help you determine if a trust aligns with your long-term goals — and how to use it smartly under the current tax regime.

📣 Final Thoughts

A family trust in 2025 isn’t just a wealth vehicle — it’s a strategic decision.When used correctly, it remains one of the most powerful tools in the South African financial playbook. But to truly benefit, you need professional insight, strong governance, and a clear plan.

👉 Thinking of setting up a trust? Reach out to Horizon Trading Solutions for a no-obligation consultation.