SARS escalates trust compliance enforcement: What trustees need to do now
SARS escalates trust compliance enforcement: What trustees need to do now
By Nicoline Benzien
The South African Revenue Service (SARS) has moved from warning to enforcement in relation to trust tax compliance. With administrative non-compliance penalties now being imposed for outstanding trust income tax returns, trustees should treat this as an immediate governance and tax risk rather than a routine filing issue.
This development forms part of SARS’s broader compliance strategy under Commissioner Johnstone Makhubu, which includes broadening the tax base and intensifying enforcement in areas where non-compliance has historically been high. Trusts have become a clear area of focus, particularly where returns remain outstanding despite repeated reminders and final demands.
Recent commentary indicates that approximately 300 000 trusts are registered with SARS, while significantly fewer appear to be fully compliant with their annual filing obligations. This gap has reportedly contributed to a substantial estimated loss in revenue, reinforcing SARS’s intention to use automated enforcement mechanisms more aggressively.
What has changed?
On 27 March 2026, a public notice was issued under the Tax Administration Act, 2011, listing the non-submission of trust income tax returns as an instance of non-compliance that may attract administrative penalties. SARS confirmed that, from 4 May 2026, it would begin issuing penalty assessment notices to trusts with outstanding income tax returns for the 2024 year of assessment onwards.
Penalty exposure for non-compliant trusts
The penalties are recurring monthly fixed-amount penalties and may continue until the non-compliance is corrected, subject to the applicable statutory limits. Depending on the assessed loss or taxable income of the trust, the monthly penalty can range from R250 to R16 000 per outstanding return. This means that delayed action can result in a rapidly escalating financial exposure.
Importantly, these obligations do not apply only to active trusts. SARS has made it clear that registered trusts, including those regarded by trustees as dormant or inactive, remain subject to annual filing obligations until they have been properly deregistered for income tax purposes. Trustees should therefore not assume that a lack of income or activity removes the need to file.
Practical steps trustees should take now
- Review the trust’s SARS compliance status without delay.
- Identify and submit all outstanding trust income tax returns.
- Confirm that the trust’s registered details on e-Filing and SARS records are accurate and up to date.
- Assess whether any penalty notices already issued should be challenged or whether a request for remission should be considered.
- If the trust is no longer required, take steps to complete the formal deregistration process with SARS after all outstanding obligations have been settled.
SARS’s latest enforcement measures make it clear that trust compliance is now a priority area. Trustees should act proactively to regularise outstanding filings and ensure that trust records are accurate, current, and defensible. If you require assistance in reviewing a trust’s compliance position, submitting outstanding returns, or dealing with administrative penalties, BDO can assist.