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  • New Reporting Obligations for Trustees: SARS Releases Additional Requirements for the 2023 Annual Tax Returns

New Reporting Obligations for Trustees: SARS Releases Additional Requirements for the 2023 Annual Tax Returns

06 July 2023

Trustees are now faced with reporting obligations regarding the "beneficial ownership" of trusts to both the Master of the High Court's Office and to the South African Revenue Service (SARS). SARS has released additional requirements for reporting on the 2023 annual trust tax returns. These new requirements aim to enhance transparency and compliance within the trust sector. This article provides an overview of the additional information now required to complete the tax return and highlights important submission due dates.

Additional Information Required for Trust Tax Returns:

Trustees are now required to provide the following information as part of the annual trust tax return:

  • Beneficial Ownership: Trustees must disclose the details of beneficial owners of the trust, providing greater transparency regarding the individuals who ultimately benefit from the trust's assets and income.
  • Annual Financial Statements: Trustees must include the trust's annual financial statements as supporting documents, providing a comprehensive overview of the trust's financial position and activities during the tax year as well as the distributions made to beneficiaries of the trust.
  • Trust Deed: A copy of the trust deed, which outlines the legal framework and provisions governing the trust, must be submitted to SARS.
  • Letter of Authority: Trustees need to provide a letter of authority that confirms their appointment as trustees and their authority to act on behalf of the trust.
  • Minutes to Meetings and Resolutions: Trustees must include minutes of meetings and resolutions that document significant decisions and actions taken by the trustees on behalf of the trust.
  • Details of the 'Main' Trustee: Trustees are required to provide details of the "main" trustee who will act as the registered representative to SARS. This trustee will be responsible for communication and correspondence with SARS on behalf of the trust.
  • Confirmation of Banking Details: Trustees need to confirm the trust's banking details, ensuring accurate and up-to-date information is provided to SARS.

Submission Due Dates:

The submission due dates for trust tax returns are as follows:

Non-provisional taxpayer: Trusts that have no taxable income or engage in non-trade activities, or have distributed all income to beneficiaries, qualify as non-provisional taxpayers. The deadline for non-provisional taxpayer submissions is 23 October 2023.

Provisional taxpayer: Trusts subject to normal tax on their taxable income fall under the category of provisional taxpayers. Provisional taxpayer submissions must be made by 24 January 2024.

Alignment with Master's Office Reporting:

SARS has indicated that it will reconcile the demographic information provided in trust tax returns with the information reported to the Master's Office. This alignment aims to identify any discrepancies and ensure consistency in reporting across institutions.

Third-Party Returns:

SARS has also introduced legislation requiring trustees to submit third-party returns. These IT3(t) certificates must contain demographic and financial information consistent with what is reported to the Master's Office and/or included in the annual financial statements. Trustees are required to submit these certificates by the end of May following the February tax year-end.

Simplifying Reporting and Statutory Obligations:

Given the complex and evolving reporting and statutory obligations faced by trustees, it is important to seek assistance to ensure compliance. Our dedicated team offers tailor-made solutions to simplify the process and ensure adherence to all regulatory requirements.

Related Article: Obligation to report beneficial ownership of trusts to the Master of the High Court

For assistance contact:

Trust Administration                      Trust Accounting                        Trust Tax Compliance

Ricardo Teixeira                              Bert Lopes                                   Doné Howell

[email protected]                        [email protected]                        [email protected]

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