How to treat a loss in a trust

Can we deduct expenses against a nil income, creating a loss, in a trust?

You can and this will be carried over to the next year if you make a profit.

SARS disallowed this because of Section 11 (a) read with Section 23(g) Please advise.

Well, it depends on the actual expenses, in theory losses can be carried forward. The disallowing of expenses is before the loss is created so it depends on what the expenses are and if the trust ever makes a profit. 11(a) and 23(g) reads that expenses must be expenses for the purposes of trade, if the trust is not seen to be actively trading then the expenses are disallowed.