Schembri, Christopher Carmelo.Harriparsad, Rajeev.2018-02-152018-02-1520162016http://hdl.handle.net/10413/15014Master of Law in Taxation. University of KwaZulu-Natal, Durban 2016.Due to length and time constraints, this dissertation will briefly examine and provide an overview of how recent proposed amendments may effect the use of a Trust as a tax avoidance tool. Trusts have recently been a source of debate following the proposals made by in our Budget Speeches and the proposals by the Davis Tax Committee. The abolition of the “Conduit Pipe Principle,” together with a stricter approach on income distributed and retained by a trust have been recommended. This dissertation will provide a historical overview on the increased taxation of trust income as evidenced by our legislation. The continuous amendments of our legislation has attempted to curb any avoidance by those adopting the use of a trust. The radical proposals made by the Davis Tax Committee in their First Interim Report seem to disregard our current economy and the need for incentives investment. The continued echo’s of reform in our annual Budget Speeches have fuelled concern that our government will eventually consider tightening the taxation of trusts. This discussion provides a historical background of the development of the legislation which currently governs the normal taxation of trusts. Tax practitioners have adopted the use of a trust to further tax avoidance. A brief discussion on our legislation commencing from the Act of 1941 to our current legislation will show that our government has taken steps to close every loophole as adopted in tax avoidance. An explanation on the deeming provisions and Section 25B of the Income Tax Act 58 of 1962 is required to understand the impact of the proposals by the Davis Tax Committee. An understanding of Practice Note 23 needed to comprehend the “Conduit Pipe Principle.” The repealing of Section 25B can only be understood after a detailed explanation of the principles as currently practised. A critique on the relevance of the current proposal will conclude the dissertation. This will be done in light of our current financial climate and based on the need to solidify our tax base as opposed to the need to reform.en-ZATax avoidance trust.Income Tax Act 58 of 1962.The conduit pipe principle.Tax avoidance.Thesis