For years, a family trust could sit quietly in the background - registered, holding assets, rarely troubling anyone with paperwork. That era is over. Between beneficial ownership reporting, third-party trust distribution returns, and now automated penalties for late income tax returns, the SARS and the Master of the High Court have turned trust compliance from a background formality into an active, monitored obligation, with real financial consequences for trustees who treat it as optional.
The trust return nobody filed
Every registered trust must submit an ITR12T income tax return, and a lack of income or activity doesn’t remove that obligation - dormant and inactive trusts must still file. Following a public notice gazetted on 27 March 2026, SARS began enforcing fixed monthly administrative penalties, ranging from R250 to R16,000 depending on the trust’s taxable income or assessed loss, against trusts with outstanding returns from the 2024 and 2025 years of assessment onwards.
Enforcement started on 4 May 2026, after final demand notices went unanswered, and the penalty applies per outstanding return and accrues monthly until resolved. SARS issues a penalty assessment notice (AP34) setting out the amounts and outstanding periods; trustees who disagree with an imposition can submit a request for remission via eFiling. Trustees can be held personally liable to settle these penalties where their own failure caused them. SARS is also cross-referencing trust registrations held by the Master and third-party data from banks to identify trusts that were never formally registered for tax at all, so the days of an unregistered or forgotten trust going unnoticed are ending too.
Beneficial ownership: The other filing obligation
Since 1 April 2023, section 11A(1) of the Trust Property Control Act 57 of 1988 has required trustees to establish, record and lodge a beneficial ownership register with the Master of the High Court through its online portal, and to keep it updated. A beneficial owner includes the founder, every trustee, any natural person who ultimately owns trust property or exercises effective control, and any beneficiary named in the trust instrument. Failing to comply with any of these beneficial-ownership obligations - whether by not establishing the register, not keeping it updated or not lodging it - is a criminal offence under section 19(2) of the Act, carrying a fine of up to R10m or imprisonment of up to five years. Despite a submission deadline that passed back in November 2024, fewer than a quarter of South African trusts were compliant with this requirement by late 2025.
Why the scrutiny isn’t going away
These reforms were part of SA’s response to being placed on the Financial Action Task Force’s (“FATF”) grey list in February 2023 for anti-money-laundering shortcomings. SA exited the grey list on 24 October 2025, but the compliance infrastructure built to get there is permanent, not temporary: the Tax Administration Act 28 of 2011 was amended to let SARS, the Master, and the Companies and Intellectual Property Commission share beneficial ownership data with each other, and SA’s next full FATF evaluation is already scheduled to run from October 2026 to October 2027. A trust that stayed under the radar during the grey-listing years has considerably less room to do so now. FATF delisting does not roll back any of the domestic legislation passed to achieve it; the obligations remain in force regardless of SA’s grey-list status.
Trustee duty, not just trust duty
Trust administration is a fiduciary role, and SARS and the Master are increasingly treating it that way. Beyond the ITR12T, trustees must ensure the trust’s annual IT3(t) submission is made, reporting amounts vested in beneficiaries so SARS can match distributions against what beneficiaries declare personally. Poorly documented or undeclared distributions expose both trustees and beneficiaries to tax consequences, and a trustee who fails to keep the trust’s filings current can be held personally liable for the resulting penalties - the trust structure no longer shields a trustee from the administrative consequences of inaction. Even a trust with no income and no distributions in a given year still needs its return filed and its beneficial ownership details kept current - silence is not compliance.
The practical approach
Every trust, however small or dormant, should be checked against three questions: is the ITR12T up to date for each year since 2024; is the beneficial ownership register lodged and current with the Master; and has the IT3(t) been submitted each year the trust made a distribution. Where a trust has genuinely outlived its purpose, formal deregistration is usually cheaper and safer than leaving it dormant and exposed to accumulating monthly penalties. None of this is a once-off exercise - it now needs to be reviewed annually, alongside the trust’s own tax filings.
If you’re a trustee and you’re not certain the trust’s ITR12T, IT3(t) and beneficial ownership filings are current, we can review the trust’s compliance status, lodge any outstanding filings, and advise on deregistering trusts that are no longer needed. Contact:
Author Name: Bashier Adam
Contact Number: 012 682 8800
Email address: az.oc.tbas-aixen@reihsab
