QUESTION $2$

$[10$ MARKS$]$

Alicent Hightower, a resident of South Africa, established a trust with her husband Cristian Cole in $2012$ for the benefit of their children Aemond, Helena and Aegon. Alicent, Cristian and Mr$.$ Otto are the appointed trustees. Mr$.$ Otto has his own accounting practice, to which he is a sole practitioner. Income of the trust is distributed at the discretion of the trustees.

Alicent started a company CrazyGreens Pty $($Ltd$)$ on $28$ February $2003,$ which offers interior designs to high$-$end customers. Alicent sold all her shares in CrazyGreens to the trust; she was the sole shareholder and sole director. On $01$ September $2023,$ on the instruction of the trustees, CrazyGreens paid the outstanding monthly trustees fees of R$48,000$ due to Mr$.$ Otto for the period $01$ March to $30$ September $2023.$ The Trust will not be required to repay this amount to the company.

SAICA Adopted.

$($a$)$ Discuss the tax consequences for CrazyGreens Pty $($Ltd$)$ of the payment made to Mr Otto by the company. Ignore VAT. $(8)$

$($b$)$ Assume that the trust established is a special trust. Would the implication in the previous question be different? Provide a reason for your answer. $(2)$