In the realm of South African trusts, recent legislative changes have ushered in a new era, significantly altering the legal and tax framework within which trustees operate. With amendments to the Trust Property Control Act and the Financial Intelligence Centre Act, coupled with fresh directives from SARS, trustees face a landscape rife with new responsibilities and compliance measures.
Here’s a breakdown of what trustees need to address promptly:
- Disclosure to Accountable Institutions and Record-Keeping: Trustees must now disclose their engagement with “accountable institutions” and maintain records of these interactions. Failure to comply constitutes an offense, potentially resulting in hefty fines or imprisonment.
- Compilation and Registration of Beneficial Ownership: Trustees are obligated to establish and record beneficial ownership information for trusts, along with registering this data with the Master of the High Court. This requirement extends to submitting beneficial ownership details in trust tax returns.
- Filing Third-Party Returns: Trustees must file third-party returns to SARS, reporting trust distributions and vesting amounts to beneficiaries. The introduction of IT3(t) reports imposes additional reporting obligations, presenting practical challenges in meeting submission deadlines.
- Completing Comprehensive Trust Tax Returns: All trusts are now mandated to register for income tax purposes and submit trust returns. SARS has updated the Income Tax Return for Trusts (ITR12T) with additional questions and mandatory supporting documents, including a Beneficial Ownership Declaration page.
- Registering as an “Accountable Institution”: In certain instances, trustees, trust accountants, and administrators may need to register as “accountable institutions” with the Financial Intelligence Centre, necessitating professional advice to navigate these requirements.
Given the complexity and urgency of these new regulations, trustees are strongly advised to seek professional assistance promptly. The intricate processes and stringent deadlines demand meticulous attention, and failure to comply could result in severe penalties. By partnering with a knowledgeable accountant, trustees can navigate this evolving trust landscape with confidence and ensure compliance with regulatory mandates.
