SARS has recently indicated that there will be a concerted effort to increase compliance within the trust product space. Over the past five years SARS has rolled out modernisation programme for trusts and in the process increased the reporting responsibilities for trusts.

Who is affected?

In terms of tax legislation, trustees are the representative taxpayers of a trust. It is thus, the responsibility of the trustees to ensure compliance with the relevant tax legislation.

All trusts in South Africa, resident or non-resident, is affected. The annual public notice issued by the Commissioner identifies all resident trusts as having to submit an income tax return. Additionally, non-resident trusts that meet the requirements as highlighted in the annual public notice, should also submit an Income Tax Return.

Consequences of having to submit an Income Tax Return 

As a result of the requirement to submit an Income Tax Return (ITR12T), it is clearly evident that all trusts should register for Income Tax purposes with SARS. This is not a new requirement, in fact, Practice Note 21 (Issued in 1994) included a requirement for trusts to submit a tax return. This Practice Note has subsequently been repealed but was replaced with the annual Public Notice. When the Tax Administration Act (TAA) was promulgated in 2011, the public notice was provided for in Section 26 and is currently still issued in terms of that section. Section 22 of the TAA requires of taxpayers to register the trust within a period of 21 days following the registration of the trust at the Master of the High Court (MoHC).

Prior to the modernisation process for trusts, trustees had to visit a SARS branch to register a trust. However, this process has now been improved to allow for registration through the SARS Online Query System (SOQS). It is of critical importance to ensure that when a trust is registered through the SOQS platform, that all supporting documents are provided and that the application for registration as a taxpayer form (IT77TR) is accurately completed. SARS indicates a 21-day turnaround time, should all the information be received. 

Consequences of non-submission of trust Income Tax Returns

SARS has recently introduced administrative penalties (Admin penalties) for trusts in terms of Section 210 and 211 of the TAA for the non- or late submission of trust Income Tax Returns. As of May 2026, admin penalties were levied for the non-submission of Tax Returns. However, due to a technical issue these levies were reversed and will now be levied from a new date. This date has not yet been communicated. It is important to note that a final demand will be issued prior to the implementation of the admin penalties; this final demand will indicate that taxpayers have a 21-day period to rectify the non-compliance by submitting their outstanding returns. Also note that these penalties will be raised for a total period of 36 months. A further penalty for the late submission of a return is also provided for. This late penalty will be levied based on a late filing of the actual Income Tax Return after the due date for the submission of the Income Tax Return.

IT3(t) submission requirements

In addition to the submission of the ITR12T, trustees are also required (since 2024) to submit an IT3(t) by SARS. The requirement to submit the IT3(t) was provided for in the third-party data public notice that was issued in June 2023, with a subsequent amendment provided in November 2023. The result of the publishing of the third-party data public notice is that trustees should report, on an annual basis, on all amounts vested to beneficiaries during a specific year of assessment. The IT3(t) is due by end September of the year following the period from 1 March to end February of the date on which the IT3(t) is submitted. For example, a trust vests amounts between 1 March 2025 to 28 February 2026 – the IT3(t) return for that period should be submitted by 30 September 2026. It is also important to note that a current requirement is that all trusts should submit an IT3(t) – irrespective of the amount vested (including where no actual vestings were made).

Updating of information of the trust taxpayer

It is important to note that in terms of Section 23 of the TAA, trustees are required to inform SARS of any changes made to certain information of the trust within 21 working days from the date that the changes are made. Trustees are encouraged to read the section to ensure that they comply, as the contravention of this section is sanctionable. These sanctions include criminal prosecution for non-compliance. 

For more information contact Auxilium Consulting and Trust Services.

Email: admin@auxiliumtrust.co.za

Phone or Whatsapp: 064 808 3820