All South African trusts must be registered for income tax with SARS to submit their tax returns yearly. It is irrelevant whether a trust is active or not. SARS will do a deep dive into the trusts’ tax return submissions, and if the trust has failed to submit its tax returns, SARS will proceed with issuing penalties, which negatively impact the financial position of the trust.
Trustees must also be aware that SARS is cross-referencing information with the Master of the High Court and other third-party data providers to establish which trusts have been registered with the Master of the High Court but have not been registered for tax with SARS. If a trust was registered with the Master of the High Court but not registered for tax with SARS, the trustees can expect to receive final demands from SARS for the trust to submit its tax returns. Failure to comply will result in penalties and unnecessary costs for a trust. Trustees must not wait until a final demand has been received from SARS. Trustees should take note that getting all compliance and tax documentation up to date and submitted is a lengthy process that should be started as soon as possible to meet the 2026 deadline of SARS.
It is therefore important that trustees register their trusts for income tax compliance with SARS and start submitting outstanding tax returns from the year that the trust was registered with the Master of the High Court. Tax return submissions don’t only require the financial statements of the trust but also accurate beneficial ownership compliance documentation, the minutes of the trust meetings, resolutions passed by the trustees of the trust and certain trust documentation.
To assist you in getting your trust affairs in order, don’t hesitate to get in touch with our Trust Office team.
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