South Africa: Additional disclosure requirements for trusts

Additional disclosure requirements for trusts have been introduced following South Africa’s placement on the so-called “grey list”

Additional disclosure requirements for trusts

Additional disclosure requirements for trusts have been introduced following South Africa’s placement on the so-called “grey list” by the Financial Action Task Force (FATF).

In order to be removed from the FATF grey list, South Africa will need to demonstrate that competent authorities have timely access to accurate and up-to-date beneficial ownership information on legal persons and arrangements and are applying sanctions for breaches of violations by legal persons to beneficial ownership obligations. To that end, the following additional disclosure requirements for trusts have been introduced:

  • Effective 1 April 2023, trustees must lodge and keep up-to-date records of the beneficial ownership of the trusts. This includes information pertaining to direct/indirect individual beneficiaries of bewind trusts, the founders, trustees, beneficiaries and any individuals who exercise effective control of any trust. Failure to comply with these requirements may result in a penalty of up to R10 million and/or five years’ imprisonment, and additional sanctions by the Master of the High Court.
  • Effective 14 February 2023, the South African Revenue Service (SARS) aims to record all beneficial owners of newly registered trusts. According to SARS, the following types of beneficial owners may be found in the trust environment: founders, trustees, beneficiaries, donors and protectors. Further, according to SARS, the ultimate beneficial owner is always a natural person. Thus, where the beneficial owner is identified as a legal entity, legal arrangement or other (e.g. partnership), SARS requires that sufficient detail be provided to clearly identify the ultimate natural person that will benefit from the assets or income of the trust.
  • Trustees are now also required to submit third-party (IT3(t)) returns (i.e., to issue tax certificates) in respect of any amount vested in a beneficiary, including net income, capital gains and capital amounts distributed. These returns, containing all prescribed information in respect of the year of assessment of the trust (i.e., the period from 1 March to the end of February), must be submitted by 30 September of the same year.

Read an April 2023 report [PDF 234 KB] prepared by the KPMG member firm in South Africa


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