4 June 2024
IF YOU ARE A TRUSTEE OF A TRUST, THERE ARE NEW LEGAL REQUIREMENTS YOU SHOULD BE AWARE OF:
SARS IT3(t) DATA SUBMISSION
Legislative background
The South African Revenue Services published requirements for the reporting of information by trustees, referred to as the “IT3(t)”. This is about the distributions to beneficiaries or persons from trusts in the previous tax year, ending February. These distributions have to be submitted by the end of September of each year.
Representative taxpayers or their representatives are to supply information to SARS as per notice 4051, amendment to notice 3631, as published in the Government Gazette no 48867. These include the amounts vested to the beneficiary of a Trust.
The representatives of the submitting entities are required to validate the activation of the IT3(t) submission functionality on SARS e-Filing. To do so, it will be necessary to have a registered representative taxpayer assigned to the trust (“Main Trustee”) on SARS e-filing, to authorise the IT3(t) functionality.
Practical implications
To ensure that the IT3(t) submissions are submitted timeously by September of each year, trustees will need to ensure the following:
- That a registered representative taxpayer is appointed to the trust on SARS e-filing to authorise and activate the IT3(t) functionality on SARS e-filing.
- Provide the financial statements compiler with the required documentation timeously to prepare the financial statements of the trust for the year ending February 2024. This information is critical to submit the IT3(t) to SARS via the IT3-01 and IT3-02 return on SARS e-filing timeously by 30 September 2024.
ACCOUNTABLE INSTITUTIONS RECORD KEEPING
Legislative background
As per the Trust Property Control Act 1988 (“TPCA”) Regulation 3B trustees are required to maintain a register of all engagements with accountable institutions.
Accountable institutions are defined as per Schedule 1 of the FIC Act. The list of accountable institutions includes but is not limited to legal practitioners, estate agents, banks and financial services providers.
The amended Regulations (Regulation Gazette No 11566 in Government Gazette No 48351) regarding the duties of trustees in terms of the amended TPCA was published in March 2023 and effective from 1 April 2023.
Section 19(2) of the TPCA contains a new penalty clause. Trustees are therefore now exposed to fines of up to R10 million or 5 years imprisonment, or both, if the trustees do not comply with the regulations.
Practical implications
Section 11(1)(e) of the TPCA requires trustees to document specific information about the accountable institutions the trust uses as agents for trustee functions involving trust property and services obtained for the trust. We can assist you with the relevant register to capture this information and place this on record.
Contact us for a consultation at info@auroprofessional.com or 021 879 3100
www.auroprofessional.com
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