Paying out of trust for a client: payee and authority
Updated · ZA · BW
Paying transfer duty, a seller, counsel or the client themselves out of the trust account is a payment on the client's instruction. Two things must be on the record every time: who was paid, and what authorised it.
Recording the payment
- Open Money held for clients and go to Move client money.
- Choose the Account and the Client fund.
- Set What happened to Paid out on the client's instruction.
- Enter the Date (the day it left the bank), the Amount and a Description such as "Transfer duty paid".
- Fill in Paid to (required) and Under what authority? (required) — for example "Client's written instruction 12 Aug", "Signed mandate" or "Contract cl. 4".
- Press Record it.
Why a payment is refused
A payment can never exceed what that client holds. If the ledger does not hold enough on that date, the payment is refused with the reason — paying it would use another client's money. Check the dates of the payment and of the deposit: money can only go out on or after the day it came in.
Closing a ledger
When a matter is finished and the balance is paid out to nil, press Close on the client's row. A ledger with money still on it says Pay it out to close it. A closed ledger can be reopened with Reopen.
Common mistakes
- Leaving the authority vague ("as agreed"). Name the instruction, mandate or clause.
- Paying the firm's fee this way. A fee is settled from a fee note — see the fees guide.
- Paying from the business account and recording it on the trust ledger. Only money that left the trust account belongs here.
Where these numbers come from
Current as at for South Africa (SARS) and Botswana (BURS). Rates and thresholds change; the sources below are the authority, not this page.
This guide explains how the rules work. It is not tax advice, and nothing here files anything for you — for your own position, speak to a registered tax practitioner.
Keep the books that answer this
Client money kept the way the rules expect — one ledger per client, every movement explained.
Keep reading
- Client money
Raising a fee note against money held in trust, and settling it from trust
Bill this client from trust → Mark as sent → Settle it from trust now: how a fee leaves the trust account and becomes the firm's income exactly once.
- Client money
The client money statement and the monthly trust reconciliation
Giving a client their statement, why it may show only money in or no logo, and reconciling the trust account to the bank every month.
- Client money
How client money (trust) works in [[brand]]
One pooled trust bank account, a ledger per client, four kinds of movement and the firm's own ledger for bank charges — how [[brand]] keeps client money apart from the firm's.