Amendments were made to the Trust Property Control Act and the Regulations thereto aimed at combating money laundering and terrorist financing which amendments commenced on 1 April 2023.
The amendments place new obligations on trustees and compel them to:
a) keep an updated record of all the “beneficial owners”* under a trust. Trustees must complete and submit the register containing the required information to the Master of the High Court, and update it as necessary;
b) disclose their position as trustee to any “accountable institution”** with which the trust engages, and disclose that the relevant transaction or business relationship relates to trust property;
c) ensure that details of all distributions, cash flow and loans by the trust to the beneficial owners thereof are reported to SARS annually;
d) report the demographic information of the trustees and beneficial owners to SARS annually;
e) keep records of all accountable institutions with which the trust engages during a year;
f) disclose the records so obtained and kept to official bodies upon request.
Failure to comply with the required record keeping and reporting duties is a criminal offence punishable by up to five years imprisonment or payment of a fine of R10 million by the trustees.
The Master’s Portal to which the registers of beneficial ownership should be uploaded is operational. Trustees should ensure that they submit the required details as soon as possible.
Should you be a trustee of a trust, Cluver Markotter can assist you with the submission of the records to the Master of the High Court.
Please contact Alicia Cupido-Woodman for more information and assistance at email address aliciac@cluvermarkotter.law or telephone number 021 808 5655.
* “beneficial owner”, in respect of the provisions of a trust instrument, means—
(a) a natural person who directly or indirectly ultimately owns the relevant trust property;
(b) a natural person who exercises effective control of the administration of the trust arrangements that are established pursuant to a trust instrument;
(c) (i) each founder of the trust; or
(ii) if a founder of the trust is a legal person, a person acting on behalf of a partnership or in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instrument;
(d) (i) each trustee of the trust; or
(ii) if a trustee of the trust is a legal person or a person acting on behalf of a partnership, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership; and
(e) (i) each beneficiary referred to by name in the trust instrument or other founding instrument in terms of which the trust is created; or
(ii) if a beneficiary referred to by name in the trust instrument is a legal person, a partnership or a person acting on behalf of a partnership or a person acting in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instrument”.
** “accountable institution” has the meaning defined in section 1 (1) of and Schedule 1 to the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001).