This tax season brings a significant change for trusts. SARS has introduced stricter reporting requirements and, from 4 May 2026, automated penalties for non-compliance are being applied to all trusts, including those that are inactive.

If you have a trust that is not fully compliant, now is the time to act. SARS has adopted a far stricter approach to trust administration, with increased oversight and automatic penalties that can quickly escalate if outstanding obligations are not addressed.

As SARS reminds trustees: “Compliance is mandatory, and non-compliance can result in fines and penalties.”

What does trust compliance entail?

Many trustees are unaware that trust compliance extends far beyond the submission of an annual tax return. All trusts are required to:

• Submit an annual Trust Income Tax Return (ITR12T), regardless of whether the trust is active or dormant.
• Ensure that all trust information recorded on SARS systems is accurate and up to date.
• Maintain detailed records of founders, trustees, donors, and beneficiaries.
• Keep proper financial statements, trust deeds, and minutes of trustee meetings.
• Submit IT3(t) returns where applicable, providing SARS with information regarding distributions and vested amounts allocated to beneficiaries.
• Comply with provisional tax requirements where relevant.

These requirements form part of SARS’s ongoing efforts to improve transparency and verify information across taxpayers.

Who is responsible?

Trustees act as the representative taxpayers of a trust and bear the responsibility for ensuring that all legal, administrative, and tax obligations are met.

This includes maintaining accurate trust records, ensuring compliance with SARS requirements, and initiating the deregistration process when a trust no longer serves its intended purpose.

Consequences of non-compliance

From 4 May 2026, SARS will automatically issue penalty assessments for all outstanding trust income tax returns from the 2024 tax year onwards.

Administrative penalties range from R250 to R16,000 per outstanding return, depending on the trust’s taxable income in the preceding year. These penalties are imposed monthly and continue to accumulate until the outstanding non-compliance is corrected, for a maximum period of 35 months.

The consequences may extend beyond administrative penalties. In certain circumstances, trustees can be held personally liable for a trust’s tax debts, while interest may be levied on outstanding amounts. Serious cases of non-compliance may also result in criminal sanctions.

The message from SARS is clear: trustees who fail to meet their obligations face increasing financial and legal risks.

What if my trust is no longer in use?

A common misconception is that inactive trusts no longer have compliance obligations. However, as long as a trust remains registered with SARS, it remains subject to all applicable reporting and tax requirements.

Compliance obligations only come to an end once a trust has been formally terminated and deregistered. Until then, SARS regards the trust as active for tax purposes and penalties may continue to accrue where obligations remain outstanding.

Where a trust is no longer required, trustees should consider formally winding it up. This process generally involves bringing all tax affairs up to date, settling any outstanding liabilities, updating trust information, and obtaining confirmation of termination from the Master of the High Court before applying to SARS for deregistration.

Count on our expertise

Trust compliance has become increasingly complex, and the cost of non-compliance continues to rise.

Whether your trust is active, dormant, or no longer being used, we can assist in assessing its compliance status, resolving outstanding obligations, and helping you avoid unnecessary penalties.

Contact us for professional guidance and practical support with your trust compliance requirements.