The duties and responsibilities of trustees have increased substantially over the past few months. There have been far-reaching amendments to the Trust Property Control Act (TPCA), and the South African Revenue Service (SARS) has introduced new requirements for reporting by trustees – all of which have significantly increased their compliance and administrative burden. Here’s what trustees need to know.
As of 1 April 2023, in terms of an amendment to the TPCA, trustees are obliged to lodge a register of the ‘beneficial owner’ information with the Master’s Office. This amendment has placed a burden of responsibility on trustees to keep up-to-date records and submit these to the Master of the High Court. In addition, SARS has introduced new requirements for reporting by trustees of resident trusts, with effect from 23 June 2023.
The Inter-Departmental Committee Beneficial Ownership and Transparency (IDC-BOT) programme of SARS aims to identify beneficial owners of trusts who may gain financially from the proceeds of the trust. The goal is to document all beneficial owners of registered trusts in order to comply with Financial Action Task Force (FATF) requirements.
The TPCA amendment sets out a new definition of the term ‘beneficial owner’. A beneficial owner now includes the founder of the trust, all trustees as well as all beneficiaries mentioned by name in the trust instrument. If any of these parties is a legal person such as a company, it must be established who the natural person or persons are who effectively control or own that company.
In terms of Section 11A(1) of the TPCA, the trustees must:
Establish and record the beneficial ownership of the trust
Lodge a register of such information with the Office of the Master of the High Court
Ensure that such information is kept up to date.
Furthermore, the representative taxpayers of trusts (including inter vivos, testamentary and special trusts) and/or the trustees must provide the following mandatory information to SARS:
Annual financial statements or annual administration accounts
Minutes of meetings and resolutions of the trustees
A copy of the trust instrument, i.e., deed or will
A beneficial ownership document per entity listed
Letters of authority.
The filing periods for trusts are:
Trusts not registered for provisional tax: from 1 July 2022 to 24 October 2022
Trusts registered for provisional tax: from 1 July 2022 to 23 January 2023.
These are indeed sweeping changes to the South African trust landscape, and it is imperative that trustees understand everything that is required of them. Failure to comply may result in a penalty of up to R10 million and/or five years’ imprisonment. It is therefore crucial to ensure that your trust has an independent, professional trustee who understands and is equipped to deal with these changes.
A corporate trustee such as Sanlam Private Wealth will see to it that the proper systems are in place to ensure compliance on behalf of our clients. For more information on our independent trustee services and how we can assist, please contact Stanley Broun on +27 (11) 778 6600 email@example.com.
we can assist you with
The formation and registration of trusts, and the provision of independent trusteeships – both local and oﬀshore.
The creation of BEE, charitable, special and Shariah trusts compliant with regulatory and legislative requirements.
The administration of deceased estates in South Africa and abroad.
Advice on complex structures, asset restructuring and bequests in foreign jurisdictions.
Advice on emigration and immigration, foreign earnings and the application of any double taxation agreements.
Updating trust deeds to ensure they’re in line with the latest changes in the trust environment.
Updating and/or drafting of wills dealing with South African and/or foreign assets.
Advice on the establishment and management of charitable organisations, their tax status and tax deductible donations.
Advice on the potential tax consequences and reporting obligations if you hold a US passport or green card, or if you have children living in the US.
Guidance on the financial implications of life-changing events, such as getting married, divorce or the birth of a child.
Sanlam Private Wealth (Pty) Ltd, registration number 2000/023234/07, is a licensed Financial Services Provider (FSP 37473), a registered Credit Provider (NCRCP1867) and a member of the Johannesburg Stock Exchange (‘SPW’).
All reasonable steps have been taken to ensure that the information on this website is accurate. The information does not constitute financial advice as contemplated in terms of FAIS. Professional financial advice should always be sought before making an investment decision.
Participation in Sanlam Private Wealth Portfolios is a medium to long-term investment. The value of portfolios is subject to fluctuation and past performance is not a guide to future performance. Calculations are based on a lump sum investment with gross income reinvested on the ex-dividend date. The net of fee calculation assumes a 1.15% annual management charge and total trading costs of 1% (both inclusive of VAT) on the actual portfolio turnover. Actual investment performance will differ based on the fees applicable, the actual investment date and the date of reinvestment of income. A schedule of fees and maximum commissions is available upon request.
COLLECTIVE INVESTMENT SCHEMES
The Sanlam Group is a full member of the Association for Savings and Investment SA. Collective investment schemes are generally medium to long-term investments. Past performance is not a guide to future performance, and the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available on request from the manager, Sanlam Collective Investments (RF) Pty Ltd, a registered and approved manager in collective investment schemes in securities (‘Manager’).
Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in a portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of a portfolio and an investor will differ depending on the initial fees applicable, the actual investment date, date of reinvestment of income and dividend withholding tax. Forward pricing is used.
The performance of portfolios depend on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-dividend date. Portfolios may invest in other unit trusts which levy their own fees and may result is a higher fee structure for Sanlam Private Wealth’s portfolios.
All portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No. 45 of 2002. Funds may from time to time invest in foreign countries and may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information. The manager may close any portfolio to new investors in order to ensure efficient management according to applicable mandates.
The management of portfolios may be outsourced to financial services providers authorised in terms of FAIS.
TREATING CUSTOMERS FAIRLY (TCF)
As a business, Sanlam Private Wealth is committed to the principles of TCF, practicing a specific business philosophy that is based on client-centricity and treating customers fairly. Clients can be confident that TCF is central to what Sanlam Private Wealth does and can be reassured that Sanlam Private Wealth has a holistic wealth management product offering that is tailored to clients’ needs, and service that is of a professional standard.