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NEW TRUSTEE DUTIES:
WHAT YOU NEED TO KNOW
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:
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:
The filing periods for trusts are:
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 or stanleyb@privatewealth.sanlam.co.za.
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.
Expert advice is crucial in dealing with cross-border estate and tax planning.
Stanley Broun has spent 13 years in Fiduciary And Tax.
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