SARS Raises the Stakes for Trusts


Trustees, trust administrators and trust owners find themselves grappling with new challenges as they navigate the ever-changing landscape of tax legislation after the recent amendments to the Trust Property Control (TPC) Act. MANDY DIX-PEEK, the head of Fiduciary at Private Clients by Old Mutual Wealth, provides insights into these ramifications.

CONCERNS around money laundering and other illicit financial activities have garnered attention in recent years, posing a challenge for authorities. South Africa’s inclusion on the global Financial Action Task Force (FATF) grey list has further spurred domestic regulatory interventions. (The FATF grey list publicly highlights countries with significant deficiencies in anti-money laundering and counter-terrorist financing measures.)

The General Laws Amendment Act, therefore, came into being in December 2022 as a crucial remedy to combat corruption, fraud and terrorism. The Amendment Act alters sections of five different laws, including the TPC Act, as entities such as trusts are considered to be susceptible to misuse for money laundering and for funnelling illicit funds into organised crime or terrorism.


The amendments to the TCP Act have a clear objective: to prevent the misuse of trusts and ensure that authorities have access to adequate, accurate and timely information about the control of trusts. The South African Revenue Service (SARS) regards these new recording and reporting requirements as a vital part of the country’s broader measures against money laundering and terrorism financing.

The amendments introduce the need to record and report information about the ‘beneficial owners’ of trusts. Apart from declaring this to SARS, the trustee must keep this information in a register and must upload it to an online facility at the Master of the High Court. Previously, the Master’s Office didn’t demand the disclosure of the ultimate ownership or control of a trust. The only information required was the identity of trustees, founders and specifically named beneficiaries.


A ‘beneficial owner’ can include the trust’s founder, a trustee, a named beneficiary, any individual with effective control over the trust or a natural person who directly or indirectly owns the trust property.

While this list may seem extensive, it is crucial to note that the beneficial owner must be a natural person. If a legal entity assumes the role of the beneficial owner, the natural person benefitting from that legal entity must be recorded.


The current tax filing season that commenced in July marks the first occasion that many tax advisers, trustees and trust service providers will encounter these recent changes. They will be guided, in part, by a June 2023 SARS communication that explains various form and system changes designed to incorporate the new recording and reporting requirements. Notably, SARS has emphasised that trusts are included in the definition of a ‘person’ under the Income Tax Act.
In summary, the representative taxpayer (the trustee/s) must:

  1. Register all trusts, including dormant trusts,
    for income tax purposes. These trusts must then submit tax returns, which must include:
    • Copies of the trust deed;
    • Annual financial statements;
    • Resolutions and minutes of trustees’ meetings.
  2. Establish and record the beneficial owners of the trust. This entails submitting letters of authority and the identity documents of all beneficial owners.
  3. As SARS is taking steps to gain a clearer understanding of the assets and income streams within trust structures, trustees will have to answer questions about any local or foreign amounts that have vested in the trust as a beneficiary of another trust. This includes providing details such as:
    • The amounts involved;
    • The number of trusts from which these amounts were received.
  4. Respond to these questions within their
    individual income tax filings, ensuring that the information aligns with the new IT3(t) certificates.
  5. Annually submit to SARS these certificates, which reflect distributions made to beneficiaries from the trusts. The initial IT3(t) certificates are expected to be submitted in April 2024 for the 2023/24 tax year.

This manual document submission process is expected to significantly extend the time required for filing.


The amendments to the TPC Act are integrated into the SARS system and will be captured though a Beneficial Ownership Declaration. This declaration necessitates the reporting of beneficial owners, as well as those poised to gain financially from the trust’s proceeds.

This information is regularly shared with the Master. Given that SARS is one of the approved entities with access to the Master’s portal, tax practitioners and trustees must exercise caution to avoid discrepancies in the information submitted.

These new reporting requirements significantly increase the compliance and administrative burden on trustees, as they now become ‘third-party data providers’ to SARS, similar to banks and insurance companies.


Trustees will be held accountable for the failure to register trusts for income tax and they will not be able to evade enforcement actions by attributing the oversight to their accountants’ failure to file the return.

Furthermore, failure to meet the ‘beneficial ownership’ reporting requirement could result in a trustee facing a maximum penalty of a fine not exceeding R10 million, imprisonment for a period not exceeding five years or a combination of both.


It is of the utmost importance for trustees, trust administrators and trust owners to fully comprehend and adhere to these new legislative requirements to avoid severe penalties for non-compliance.

The choice is clear: either attempt to navigate the complex legislative landscape independently, risking compliance errors and potential enforcement action or opt for the guidance of a professional trustee.

Private Clients by Old Mutual Wealth advocates the use of independent, professional trusteeship as the most reliable strategy to mitigate risk and ensure that trusts withstand legal scrutiny.


Private Clients by Old Mutual Wealth offers holistic, bespoke solutions for high‐net‐worth clients. We partner with you and various specialists, tapping into the required resources to provide an integrated plan for your holistic financial affairs, including investments, wealth structuring and transfer strategies, proactive tax planning and portfolio lifestyle and administration. Our level of individual attention and interaction is a defining standard in the personal service we provide. We boast a strong track record in wealth and investment management. As part of a brand that has been growing wealth for South Africans for nearly two centuries, we believe that there is no substitute for experience that comes with managing wealth through various economic and market cycles. Our team therefore has several decades of success and experience in successfully working with individuals, families, trusts and entrepreneurs in managing their wealth.