Obligation to report beneficial ownership of trusts to the Master of the High Court
Obligation to report beneficial ownership of trusts to the Master of the High Court
With effect from 1 April 2023, trustees are obligated to lodge and keep up-to-date records of the beneficial ownership of trusts. This amendment places a burden of responsibility on trustees to record with The Master of the High Court comprehensive data regarding beneficial ownership of trusts.
Who is defined as a 'beneficial owner' of a trust?
The TPCA defines ‘beneficial ownership’ to include the founders, trustees, named beneficiaries and any individuals who exercise effective control of any trust.
A 'beneficial owner' is always a natural person. In the instance where a legal entity fulfils the role of a beneficial owner, the natural person/s who ultimately benefit/s from the legal entity will need to be recorded as the beneficial owners of the trust.
What action is required?
Trustees are obligated to record beneficial ownership data on the Master of the High Court's online portal. The Master's website now provides for the upload of an electronic register through an online portal. This is the direct link: Masters Office Web Portal - Trust (justice.gov.za)
This is a manual exercise that will take some time. The new reporting process requires detailed data on each beneficial owner in relation to the trust to be uploaded to the Master's Office website. Initially, the task is to capture basic details of the trust and details of the person capturing the 'beneficial ownership' information. Thereafter, an Excel file must be uploaded. This must be populated with comprehensive data on each beneficial owner of the trust (max 10MB and only one single Excel file allowed).
The process may be time consuming if you do not have a system to pre-populate the Excel spreadsheet for each trust for uploading. Trustees are also reminded to keep certified copies of ID documents of all 'beneficial owners'.
Only trustees are permitted to record the data with the Master of High Court. However, the authority to upload the beneficial ownership data on behalf of a trustee can be given to a Trust Administrator under a Power of Attorney from the trustees.
Consequences of non-compliance
Failure to comply with these requirements may result in a penalty of up to R10 million and/or five years' imprisonment for trustees. Additional sanctions may be applied by the Master of the High Court or the Financial Intelligence Centre.
It is likely that trust changes lodged with the Master of the High Court may trigger an inspection of the Beneficial Ownership database, resulting in penalties being administered for non-compliance.
We urge you to take immediate action to ensure compliance with these new requirements to avoid any penalties. BDO can assist trustees to digitally submit all the required information under a Power of Attorney. Please reach out to BDO Trust Administration on trusts@bdo.co.za if you require assistance in maintaining compliance with the amended Trust Property Control Act.