Trusts

• 15 September 2023 -Enhancements to Trust Beneficial Ownership information
  
  SARS’ aim is to record all beneficial owners of registered Trusts in order to comply with the Financial Action Task Force (FATF) requirements. In this regard, certain information must be submitted via e-Filing. These documents may include, but are not necessarily limited to, the following:

• • An organogram, illustrative, or schematic diagram depicting effective control of the Trust. Where the Beneficial Ownership is in the form of other legal arrangements or legal entities, this should be provided in a separate attachment.
  • An Excel spreadsheet containing the above information; or
  • Such other document(s), which will elaborate on Beneficial Ownership in relation to the Trust.

When capturing the beneficial ownership information, it is mandatory for the current year’s return that at least one document be submitted that relates to beneficial ownership information. In the event there are more than 20 beneficial owners, the taxpayer must upload a supporting document that reflects the additional beneficial owner(s).

All minutes, excluding those dealing with internal trustee governance arrangements and/or administrative matters, must be submitted.

•  1 August 2023 – Update on the distribution of funds to non-resident Trusts by resident Trusts

It has been the practice of SARS not to approve the release of funds when resident Trusts make distributions to non-resident Trusts. Following queries in this regard, SARS herewith clarifies its stance on the matter and confirms that it will consider approval for the release of funds/amounts distributed to non-resident Trusts. The process required to obtain the necessary approval is to apply for a manual letter of compliance at SARS by emailing [email protected].

SARS has taken note of the fact that the SARB has relaxed certain exchange control requirements but has decided, based on the risks involved, to introduce the above-mentioned requirement to mitigate the risks.

SARS will perform verification processes to ensure that strict interpretation of the relevant sections of the Act are complied with. Note that the non-resident Trust must be a beneficiary of the resident Trust, and the distribution will only be considered by SARS if it complies with the terms and conditions in the Trust instrument of the resident Trust.

SARS will only allow such distributions if the resident Trust demonstrates that all tax liabilities in respect of the distribution were or will be settled.

Also see the Supporting Documents for Approval of International Transfers (AIT) webpage.

• 20 June 2023 – Trust Filing Season: Form and system changes to be introduced from 23 June 2023 

  The filing periods for Trusts are as follows:

  • Trusts that are not liable for Provisional Tax runs from 7 July 2023 to 23 October 2023; and
  • Trusts that are liable for Provisional Tax starts from 7 July 2023 to 24 January 2024.

  In addition, the beneficiaries, and donors (where deeming provisions apply) of a Trust must declare their income that was vested in a beneficiary by the Trust during the year of assessment in their income tax returns.

  The representative taxpayer (the trustee(s) of a Trust) or the appointed tax practitioner must file an income tax return for the Trust on an annual basis and during the Trust return filing period to avoid penalties and interest. Use eFiling to submit the Trust return quickly and conveniently.

  SARS continues to improve its service offerings, systems and processes related to the filing of income tax returns for Trusts (ITR12T). We believe that these changes will provide taxpayers with the clarity and certainty they require to meet their tax obligations, making it easier for them to comply.

  The annual notice, issued by the Commissioner, requires of ALL Trusts to submit a Trust return. It is thus imperative that all representative taxpayers of Trusts (trustees) ensure compliance in this regard.

  With effect from 23 June 2023, SARS will introduce changes to the Income Tax Return for Trusts (ITR12T), eFiling enhancements, i.e., additional questions to the Income Tax Return Wizard to be completed, and mandatory supporting documents that must accompany the return. See the ITR12T prototype form here.

  The changes being introduced include, amongst others:

  • Updates to the wizard on the Trust return
    • Additional Questions to determine if any Local or Foreign amount(s) were vested in the Trust as a beneficiary of another Trust or deemed to have accrued in terms of s7 during this year of assessment; and the number of Trusts from where these amounts were received.
  • A Simplified Return for Passive Trusts
    • To provide for a less cumbersome return, where limited Trust specific activities occurred during the year of assessment. The wizard and guide will provide guidance in this regard. The taxpayer must ensure that the correct “type” of return is selected on the first page of the tax return (Income Tax Return Wizard).
  • Other enhancements to the Trust Return (ITR12T)
    • A new field for credit agreements and debtors’ allowance “Lay Byes” (S24) has been added under both sides of Special Allowances not claimed in the Income Statement and Allowances/Deductions.
    • Beneficial Ownership Declaration page to record all beneficial owners and those who may gain financially from the proceeds of the Taxpayer.
    • Based on the wizard question above (relating to distributions received from other Trusts), the required number of containers for these distributions will be opened in the return. This will allow taxpayers to provide the detail of the distributions received from other Trusts into the individual containers (e.g. distributions received from 5 other Trusts, 5 containers will automatically be opened).
  • Supporting documents to be submitted with the ITR12T
    • All mandatory supporting documents must be uploaded and submitted with the Trust return. This includes, amongst others, the Trust instrument, Annual Financial Statements, Letters of Authority (LoA) and resolutions/minutes of trustee meetings. The requirements will vary according to the Trust type. (Use the drop-down menu to check the required supporting documents).
  • Enhancements to eFiling
    • A pop-up notification when the return type is selected. Should the taxpayer select an incorrect tax type based on their registration, this pop-up notification will alert the taxpayer to select the correct return.

  Managing Tax Compliance Matters

  Trusts are included in the definition of a “person” in terms of the Income Tax Act, 1962 (ITA), and as such, the representative taxpayer (trustee/s) has a responsibility to register all Trusts for income tax purposes.

  Note that the representative taxpayer (the trustee/s of a Trust) or the appointed tax practitioner MUST file an income tax return for the Trust on an annual basis in terms of the annual notice and during the Trust return filing period.

  We have made it easier for you:

  • The quick and convenient way to obtain and file a Trust Return (ITR12T) is to register as an eFiler on SARS eFiling, request the return, and then customise it by completing the questions on the first page (wizard) of the return.
  • To register a new Trust for income tax and submit supporting documents, use our online platforms on the SARS website at sars.gov.za in the SARS Online Trust Registration link.
    
    
• 28 February 2023 – eFiling registration enhancements for Trusts
  During the registration process on eFiling, Non-resident (Foreign) Trusts and Collective Investment Schemes Trust (CIS) are now able to register without the mandatory Trust registration number (as indicated on the Letter of Authority (LOA)).

A dropdown was implemented to allow the user to select the Trust Type first. The following Trust types will still be required to provide a Trust registration number: Inter vivos Trusts, Testamentary Trusts, Estate CGT Trusts and Special Trusts. For more information see the updated Guide on how to Register for eFiling and Manage Your User Profile.

• 14 February 2023 – Trust Registration Beneficial Owners Details
  In order to comply with the Financial Action Task Force (FATF) requirements, SARS aims to record all beneficial owners of newly registered Trusts.  The Trust Registration query on SARS Online Query System has been enhanced to allow for the capturing of the beneficial owner’s details. For more information, see the updated Guide for the SARS Online Query System.